How can I tax items at different rates on the same invoice?

willb1 · ‎December 10, 2018

I sell items that carry different sales tax rates, so I cannot just tax the total on an invoice I have to tax each item individually. How do I set this up? QB seems only to want to tax the total of taxable items on the invoice. Also, if I create separate invoices to bill these items QB wants to change the tax assigned to the customer each time I sell an item with a different tax rate. Any videos or articles on this? Thanks.

Rustler · ‎December 10, 2018

@ will

the only way to use different sales tax rates for different items is

create a sales tax item with a 0% rate and assign that to the customer

on the invoice, list all items for rate 1, follow with a sub total item, follow that with sales tax item for rate 1

list the items for rate 2, sub total item, sale tax item for rate 2

etc etc

View solution in original post

Rustler · ‎December 10, 2018

@ will

the only way to use different sales tax rates for different items is

create a sales tax item with a 0% rate and assign that to the customer

on the invoice, list all items for rate 1, follow with a sub total item, follow that with sales tax item for rate 1

list the items for rate 2, sub total item, sale tax item for rate 2

etc etc

willb1 · ‎December 10, 2018

Thanks, Rustler. I will give that a try. It is much more complicated than I had hoped but I see that QB wants to assign a general rate to each customer which is the underlying problem. Adding the fields you suggest to the invoice will require building an invoice but it is what it is.

Rustler · ‎December 10, 2018

You're Welcome

willb1 · ‎December 10, 2018

Rustler, after going to the Layout Designer I don't see a way to add the fields you suggest to an invoice. Can you point me in the right direction? How do I place a subtotal field on the invoice. This would require customization through the Layout Designer, correct?

willb1 · ‎December 10, 2018

Just figured it out. Thanks!

Rustler · ‎December 10, 2018

You're Welcome

dealerschoicegam · ‎December 10, 2018

I have a similar issue. Can you give me a step by step to customize through the layout designere.

SkinnyRaven · ‎December 10, 2018

You'll need to set up a sales tax group and add the tax items to the group.

willb1 · ‎December 10, 2018

I don't think this is a solution?
Groups would still apply to the total of the taxable items invoiced rather than single items.
So, this would work only if I could use multiple groups on a single invoice, which is the original problem of not being able to use multiple tax rates on a single invoice.

willb1 · ‎December 10, 2018

To clarify: I need to apply different sales tax rates to individual items on an invoice, not multiple tax rates on each item. Anything come to mind? Appreciate the help.

SkinnyRaven · ‎December 10, 2018

We don't have sales tax here so I'm not understanding how multiple items on one invoice could have different tax rates.

willb1 · ‎December 10, 2018

Some of my service items are taxable as labor and materials and other service items are taxable as materials only. I could solve the problem by breaking out the labor and materials as items but this requires a lower level of itemization than I wish to record. I don't want to put labor and materials on the customer's invoice, just the service items they purchased.

caly11polo · ‎December 10, 2018

Some state have State Tax rate, Country Tax Rate, and Local city tax rate. Also, I have a client who has a bar and we need to add sales tax AND ABC tax on liquor. I have not figured out how to o this yet. I just started with the bar client today.

Neal · ‎January 01, 2020

I am in texas and i have a simple question.

in my area we need to charge 8.25 percent on actual merchandise and 6.25 on our service. why cant it allow me to set 6.25 on all services and 8.25 on merchandise. I had quickbooks online for a few years and it did it very easy. so if i charged line item of 100.00 parts and 100.00 in service the tax would show up 14.50 total due. it charged 8.25 on the parts and 6.25 on the service automatically and very easy. i cant figure out how to simply apply that to quickbooks enterprise.

please help

Rasa-LilaM · ‎January 02, 2020

Welcome to the Intuit Community, Neal.

Let’s create a specific sale tax for each item and then set up a 0% rate. We’ll use the latter in the Tax section for QuickBooks to calculate the correct amount.

If you haven’t turned on the Sales Tax feature, go to the Preferences page to set it up. Here’s how:

Navigate to the Edit menu and pick Preferences to select Sales Tax.
Choose the Company Preferences tab to mark the radio button for Yes in the Do you charge sales tax section.
Next, hit the Add sales item button to access the New item window.
From there, choose Sales Tax Items and fill in the field boxes.
Make sure to enter the correct rate (8.25% or 6.25%).
Click OK.
Follow steps 1-6 from the above process to enter the 0% rate.

When creating an invoice, input the service/merchandise on the first line item. Next, go to the next line and select the appropriate sales tax rate (8.25% or 6.25%).

We’ll have to perform the same procedure for the remaining product/service. Once done, click the Tax drop-down to choose 0% and then tap the Save and close button.

I’m also adding an article with a breakdown of the links for each topic about the Sales Tax option in the desktop version: How do I?

Stay in touch if you have any other concerns or questions about the product. Please know I’m here to help you. Have a good one.

somerandomguy · ‎January 04, 2021

Does this process reflect on monthly sales tax reports and liabilities?

Nick_M · ‎January 04, 2021

Hey there, somerandomguy.

If you follow the steps provided above by my colleague, then yes this will reflect on your monthly sales tax and liabilities reports. However, I would suggest reaching out to an accountant just to be sure everything is set up accurately and just as it should be. If you don't have one yet, you can check out our Find an Accountant tool. Following that link and entering the required information will help you to find a local accountant to go over your books.

If there's anything else I can help with, feel free to post here anytime, night or day. Thanks again and I hope you have a nice day.

bb100 · ‎July 22, 2022

Generally speaking this forum is for accountants trying to figure out how to post something in QB from how to use the software inquiry and not asking for accounting principals. Any comment to contact an accountant seems ridiculous, useless and unhelpful.

JC3000 · ‎October 08, 2023

Is it possible to use a sales tax group and a sales tax item on the same invoice?

AbegailS_ · ‎October 08, 2023

Hello there, @JC3000. I'm here to ensure you're able to show sales taxes to your invoices in QuickBooks Desktop (QBDT) .This way, you can keep your financial data accurate.

In QuickBooks Desktop (QBDT), using a sales tax group and a sales tax item on the same invoice is unavailable. QBDT does not support the use of sales tax groups.

Instead, you can only apply a single sales tax item to an invoice. If you have different tax rates for additional items or services, you would need to create separate line items on the invoice and apply the appropriate sales tax item to each line item individually.

To learn more about sales tax in QuickBooks Desktop (QBDT), you may check this article: Set up sales tax in QuickBooks Desktop.

Also, you may want to check out these articles as your reference to learn more about A/P workflows you can use and how you can troubleshoot issues you may encounter while managing sales taxes in QBDT:

If you need help with other tasks in QBDT, go to this link to go to our general topics with articles.

Let me know if you have other concerns about setting up sales tax and managing sales transactions in QBDT. I'm just around to help. Take care always.

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How can I tax items at different rates on the same invoice?