Turn off sales tax in QuickBooks Online

Turn off automated sales tax

You can now turn off automated sales tax, without having to delete any sales transactions. Here’s how:

1. Go to Taxes, then select Sales tax (Take me there).
2. Select Sales Tax Settings.
3. Select Turn off sales tax.
4. Select Turn off to confirm.

Once you’ve turned off sales tax, you may go back to any transactions you’ve already created that have sales tax you want to remove. Here’s how:

1. Go to Reports (Take me there).
2. In the Find report by name field, enter Sales Tax Liability Report. Then, select the report.
3. In the Report period ▼ dropdown, select All Dates. Then, select Run report.
4. In the Taxable Amount column, select the amount to see the transaction report. This will show all transactions that have sales tax for the tax jurisdiction level selected.
5. In the Transaction Type column, select the transaction.
   Note: Make sure to take note of all the details of the transaction(s).
6. In the sales transaction, uncheck the Tax checkbox. This removes the sales tax.
   Note: Once you’ve created the sales transaction, you may need to reissue the invoice, if the customer hasn’t paid yet, or credit the customer for the sales tax, if they’ve paid.

When sales tax is turned off:

• All of your historical sales tax data is saved for you, such as sales tax on transactions, tax agency info, and your sales tax liability.
• Sales tax is still shown on past transactions for reporting purposes so that your books are correct. 
• If you have any recurring invoices, the sales tax will no longer be calculated going forward.
• If you later decide that you want to use sales tax, you can turn it on again. 

Your tax agencies

When you turn off sales tax, all your tax agencies are set to inactive. This means that you'll stop collecting tax for each agency you’ve set up in QuickBooks Online. If you need to deregister with any of your sales tax agencies, you'll need to contact them directly.

All your tax agency info will be saved in case you want to turn sales tax back on later. You can see the tax agency info in the table (all the data that was on the tax agency card). 

Note: If you turn sales tax back on, tax agencies won’t be turned on automatically and you’ll need to: 

• review the states you currently sell into, and 
• turn on any agencies you’re registered with. 

Your sales tax liability reporting 

All your sales tax liability reporting will still be available when you turn sales tax off. For example, each tax agency will be shown under Other Current Liabilities on your Balance Sheet (whether you still owe sales tax or not).

Your custom rates

Any custom rates you’ve set up will remain active when automated sales tax is turned off. But you can't add any custom rates on invoices or sales receipts as the tax fields will no longer appear when sales tax is turned off.

Turn off automated sales tax

Here’s how to turn off automated sales tax:

1. Go to Taxes, then select Sales tax (Take me there).
2. Select Sales Tax Settings.
3. Select Turn off sales tax.

Select Turn off to confirm.