Set up where you collect sales tax

Note: This article is intended for users of automated sales tax. If you currently use manual sales tax, you may be able to switch to automated tracking.

QuickBooks Online track of your state's tax laws to accurately calculate sales tax and returns. All you need to do is tell QuickBooks where you collect sales tax.

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What you’ll need

• Your business must be registered with the state for sales tax before starting setup.

Important: Only add tax agencies after your state registration is finalized. All sales taxes collected from customers must be paid to the associated agency by law.

Set up sales tax locations

When you first set up automated sales tax, here’s how you tell QuickBooks where your business operates:

1. Go to All apps , then Sales Tax, then Overview (Take me there).
2. Select Use automatic sales tax.
3. Make sure your business name and address are correct. If you’re missing an address, enter it. Then select Next.
4. When asked if you need to collect sales tax outside of your state, select Yes or No.
   • If you selected Yes, enter the additional state in the Select an agency field, or select a location from the dropdown menu.
   • Repeat this process for every required city, county, or state.
5. Select Next, then either close the window or select Create invoice.or go to Create invoice. 
6. Use the Filing frequency dropdown menu to select how often you file for that agency.
7. If you collect sales tax for more than one location, select Next agency and repeat selecting the filing frequency for each. 
8. Select Save.

Add more tax agencies

If you need to add more tax agencies or update filing frequencies later, use these steps:

1. Go to All apps , then Sales Tax, then Overview (Take me there).
2. Select Sales Tax Settings.
3. Select Add agency. 
4. Choose the specific agency and its filing frequency.
5. Enter the start date and select your reporting method, either cash or accrual.
6. Select Save.

On your next invoice or sales receipt, QuickBooks will automatically use your business address as the sale location. If needed, you can always change the location on the transaction.

Results

QuickBooks will use your business address as the sale location on your next invoice or sales receipt, and apply the correct sales tax to the invoice totals. 

Next steps

• Start a new invoice or sales receipt to make sure we’re calculating sales tax correctly. 
• You can manually change the sale location for individual transactions if necessary.

Related links

• Use automated sales tax on an invoice or sales receipt