What is the right way to categorize my SaaS (cloud based software) product in the special sales tax category? Only options there are downloadable or by CD.

Hi @EfficientRabbit , thank you have posted in quickbooks community.

Prefer downloadable. For further information, here i give you article about software and cloud expense .

Glad to assist you.

Glad to assist you. 

@EfficientRabbit 

Just to clarify, do run a SaaS company?

Yes

Yep!

Thanks but I'm referring to revenue here (sale of our subscription software) not categorizing expenses so this doesn't seem relevant.

@EfficientRabbit 

The taxability for SaaS can be different from state to state. If you have questions about the taxability of the software service you sell, we'd suggest giving your state's DOR a call and asking them to confirm how the software you sell should be taxed in your particular scenario. For more references, explore this AST Filing and Reporting app to integrate with your QBO.

https:// taxjar.grsm.io/mytax

I don't have questions about the sales tax I owe. I've got problems setting up quickbooks in a way to correctly calculate the number because it doesn't have an appropriate product category for Software as a Subscription.

I'm looking to see how other SaaS businesses configure their products in QBO.

Hello there, @EfficientRabbit.

Let me help you configure the sales tax on your product.

You can select the Software as a Service(SaaS) without the downloadable software category on your sales tax in creating your product. You can follow these steps on how:

1. Go to the Gear icon.
2. Under the List column, select the Products and services.
3. Click the New button. If the already created the item, you can edit them by clicking Edit in the item section.
4. Choose the Sales tax category drop-down.
5. Select the Choose a special category option.
6. Go to the Information technology, then choose Software as a Service(SaaS) without the downloadable software.
7. Click the Done button to save.
8. Fill out all the necessary fields to set up your product.
9. Hit Save and Close.

I've also added an article that helps you import your product and services from your excel to your QuickBooks.

Please know that I'm always here in the Community to help. Keep safe, and have a great day.

Hi there, 

Thank you for your response. What should I do if I already created my product and invoiced my customer with it? I cannot seem to change it now. Or is there way to change the product now? 

Cansu

Hello, @EfficientRabbit. 

Thanks for reaching back out to the Community. Yes, there's a way to change the information in a product or service. All you need to do hit the Edit option on the product you've already created like my colleague stated above. 

Here's how: 

1. Go to the Sales tab. 
2. Select the Products and Services portion. 
3. Locate the product. 
4. In the Action column, tap the Edit button. 
5. Make any necessary changes. 
6. Once you're done, press Save and close. 

Here are a few articles that can help you and your business in the future with products and services: 

• Change product and service item types in QuickBooks Online

• Change the account for a product/service item

• Group your products and services into different categories

This should do the trick. If you have any other questions or concerns, please don't hesitate to ask. Have a great day!

Very helpful.  Thank you

Very helpful.  thank you.  

This option doesn't appear to be available anymore. Can you provide an update on how to find SaaS in the current menu options? 

Welcome to the Community, @aw11541. 

This option is still available within QuickBooks Online (QBO). To find it, please follow the steps below.

1. Go to the Gear icon, then choose Product and services.
2. Click the New button and choose an item category. Or you can edit an existing item.
3. Navigate to the Sales tax section, then click Edit sales tax.
4. Scroll down and click Software & hardware to expand the list.
5. Choose the closest option that will fit your needs.
6. Select Done.

Moreover, you can also explore third-party applications you can integrate with QBO in managing your SaaS. 

Additionally, you can refer to this article about downloading your lists in the program: Import products and services into QuickBooks Online.

Let us know if you need further assistance in managing your product and services. We'll be here to help you in any way we can.

@aw11541 

Consider using a subscription management app. The downside is you can't use QB Payment to accept payments.

Thanks for confirmation! I am able to see that category but there are no "software as a service" options, all mention download and/or CD. I know some states don't tax on anything that is fully cloud so I'm not sure how to categorize the products we sell that are fully cloud-hosted.

Thanks for confirmation! I am able to see that category but there are no "software as a service" options, all mention download and/or CD. I know some states don't tax on anything that is fully cloud so I'm not sure how to categorize the products we sell that are fully cloud-hosted SaaS products.

Hello there, @aw11541.

Allow me to chime in and share some information about the category to choose for Software as a service in QuickBooks Online (QBO).
 

That said, you can reach out to an accountant on what category to choose for SaaS products. They can also advise you on the steps to take and keep your books accurate. 

In addition, you can refer to this article guide to learn how to edit sales tax rate in QuickBooks Online (QBO): Edit sales tax rate in QuickBooks Online

Here are some helpful articles that might be useful to you in the future:  Manage sales tax payments in QuickBooks Online

Feel free to reach out to us anytime if you have further questions about sales tax in QBO. The Community is always available for you.