Turn off automated sales tax in QuickBooks Online

Disable automated sales tax in QuickBooks Online to stop future tax calculations and set tax agencies to inactive.

Overview

If you no longer charge sales tax or enabled it by mistake, you can turn off the automated feature. This action stops tax calculations on new transactions but preserves your historical data for reporting.

Key impacts:

• Recurring invoices: Future invoices will no longer include sales tax.
• Tax agencies: All agencies become inactive, though your registration info is saved.
• Reporting: Sales tax liability reports remain available for past data.
• Custom rates: Existing rates remain active, but you cannot add new ones to transactions.

Note: If you need to deregister with a tax agency, you must contact them directly.

Turn off sales tax

Follow these steps to disable the feature.

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

Remove sales tax from existing transactions

Turning off the feature does not remove sales tax from transactions you have already created. You must edit these manually if needed.

1. Go to Reports , then Standard reports (Take me there).
2. Search for and select the Sales Tax Liability Report.
3. In the Report period ▼ dropdown, select All Dates, then Run report.
4. Select the Taxable Amount for a jurisdiction to see the detailed transaction list.
5. Select a transaction to open it.
6. Uncheck the Tax checkbox (or select the appropriate tax-exempt option) to remove the tax.
7. Select Save and close.

Note: If you edit a paid invoice, you may need to issue a refund or credit to the customer for the tax amount.