Good to have you in the Community space, Calvin.
Applying two different tax rates to a different item on an invoice is currently not possible in QuickBooks Online (QBO).
As a way around, you can look for a third-party app that lets you apply to tax rates on an invoice. Just hover to the Apps menu and browse for an app from there. You can also visit our QuickBooks Apps page for additional reference.
Once you've found one, click Get app now to link it to your QBO. In regards in making the tax rate based on the item, you'll want to add a custom tax rate. This way, it'll be based on the product and not the location. I'll show you how.
- Go to the Taxes menu.
- Select Sales tax settings.
- In the Custom rates section, select Add rate.
- Select either Single or Combined.
- Enter a name for the combined rate and the different sales tax requirements.
- If necessary, select Add another rate to add more than two rates, then select Save.
You can also see this link for more details: Set up your sales tax in QuickBooks Online.
I'd also recommend working with your accountant or tax expert for further guidance. This way, we can ensure the accuracy of your accounts after making these changes.
I can see having this option is beneficial in running your business flawlessly. I suggest sending your feedback to our product engineers. This way, they can review it and might consider adding this in the future updates.
Let me also add this article that you can read for guidance in efficiently filing your returns: File your sales tax return and record tax payment in QuickBooks Online.
I'm always here to back you up if you need more help with taxes and invoices. It's always my pleasure to assist you in running your business seamlessly. Take care and stay healthy!
