Sales Tax

Hi there, Yogi.

I can share some basic troubleshooting steps that can fix this issue.

Normally, the late fees shouldn't be subjected to sales tax since the Taxable option hasn't been marked. It could be that accumulated temporary internet files in the browser are the root cause of this unusual behavior.

To rule this out, you can access your QuickBooks account through a private or incognito window. This mode doesn't save site data, cache, and cookies. Check out these shortcut keys:

• Press Ctrl + Shift + P for Firefox
• Press Ctrl + Shift + N for Chrome
• Press Command + Shift + N for Safari

Once done, pull up your Sales Tax Liability Report again. If the late fees are now showing as nontaxable, close the incognito window then go back to her regular browser. Next, clear the cache to remove the accumulated junk files and enhance your browsing experience. You can also switch to other supported browsers as an alternative solution.

However, if the procedures above didn't make any difference, I recommend getting in touch with our technical supports. This way, we'll be able to pull up your account in a safe environment and conduct an investigation. Here's how:
 

1. Go to the Help icon.
2. Select Talk to a human.
3. Enter "Talk to a human" again in the search bar.
4. Choose I still need a human, then click Contact us.
5. Select Get a callback or Send a message to start a conversation.

I'm also adding these articles to help manage and file your sales tax in QuickBooks:

• Using automated sales tax

• File your sales tax return and record tax payment

Drop me a comment below if you have any other concerns or additional questions about sales tax. I'll always have your back.

Hi Yogi,

Hope you’re doing great. I wanted to see how everything is going about the issue with your invoices and late fees. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at anytime.

Looking forward to your reply. Have a pleasant day ahead!

Hello. I appreciate your input; however, this did not resolve my issue. The application of sales tax to late fees seems to be quite random; I cannot find a common denominator. I did contact support and the solution offered on two separate occasions was to stop using automatic late fees. My attitude is that if it is broken, then fix it. This issue is not showing up just on my computer, and it is not showing up in just this one company. (The second company has stopped their automatic flat fee late charges.)  The current company will apply late fees about 500 times a year at least, so the automatic application is a desired process. Less than 4% of these late fees are slipping through as taxable and in a very scattered pattern. If I turn off the Sales Tax center, will the reports still be available in the report list?

Let me allow to lend a hand to fix this issue, Yogi.  

Once you've activated the automated sales tax, you can no longer turn it off. You can edit the customer's tax information if you don't want taxes calculated. Let me guide you with the steps.

1. Go to the Sales tab and click Customers.
2. Select the customer
3. Tap the Edit tab.
4. Open the Tax info folder and untick the This customer is taxable.
5. Click Save.

After that, taxes won't calculate in your invoice. Also, the old report will still be available.

For more information about different types of sales tax, check out these articles:

• Manual Sales Tax.
• Automated Sales Tax. 

Also, I recommend getting back to our Support Team. This way, a representative can check the previous case you had and be able to help and guide you further. Or request a callback from our support agent. This way, you won't have to wait on the line. 

You can always visit us here if you have any other concerns. I'm here to help. Keep safe!

This just keeps getting better, You say that now I have turned on the automatic sales tax I can never turn it off? That does not seem logical. And it makes me feel imprisoned. I did read the articles you sent but it is a bit vague on recording the payment and any adjusting entries like payment discounts or late fees when using the automated module. 

Hello Yogi!

I know the reason why there is a sales tax on late fees. Let me help you.

Late fees are calculated based on the balance due and it is inclusive of sales tax, shipping as well as discounts, if applicable. This is working by design. 

Also, note that changes to the Late Fee item are not retroactive. The only way we can remove the sales tax from the old transactions is by manually unchecking the Tax checkbox on invoices. 

You may want to check this link on how the said feature works: Set up and apply automatic late fees to invoices.

Additionally, you may visit this link for more info on how QuickBooks Online can help you with sales taxes: Manage taxes in QuickBooks.

Do you need more clarifications? Comment again here and we'll reply as soon as we can. Have a great day!

Thanks for jumping in here. The late fees are flat rate in this situation, not affected by the customer balance, and not a taxable item. I don't understand how the item in the product list, Late Fees, suddenly shows up marked taxable. This company pretty much flies on auto-pilot and the users claim to not understand what the item list is or how to access it or why they might need to do that.  Last year we cleaned up the errors in 2019, and I recently sent the manager a list of 2020 instances to clean up. I did discover a couple instances in which the clerk had merely unchecked the taxable box after the customer had paid in full. I am hoping if I just keep scrubbing away, the problem will go away.