Why is QB-Online changing the tax rate on invoices? Recurring invoices use custom rate, actual invoices say "based on location." I manually change back to custom rate.

Hello, @bowmand.

QuickBooks Online will automatically calculate sales tax for you based on the customer’s address on file. QuickBooks knows the tax rules, wherever you run your business.

To know more on how QuickBooks calculates sales tax and rules for how to tax a product or service can change depending on what you sell and where you sell it, you may refer to these articles below:

• Sales tax in QuickBooks Online.
• Add sales tax to your products and services.

I also recommend getting in touch with your accountant or tax expert so you’ll get more information about the tax rate.

If you have any other questions, please don’t hesitate to leave a comment below. Have a nice day!

This answer did not address my question. I did not ask about how QB calculates taxes. Rather, I asked why the custom tax rate found in a recurring invoice template is not used when QB creates an invoice from the template.

Notes:

1. Customers' addresses are not on file in QB.

2. Every invoice with this problem is created from a recurring invoice template.

3. Every template uses the same custom rate.

4. If I manually change the rate on the invoice to the custom rate, I am warned that the invoice was created using a recurring template--which is not true. The template has the custom rate, and the invoice does not.

Result: Hours of manually updating the invoices to use the custom rate.

Background: I created the custom rate and templates more than a year ago, and for months, every invoice had the correct custom rate. The problem described above began immediately after being updated to the new tax center. That was the same time that many clients had their status changed to non-taxable. You cannot even begin to understand what a headache that caused.

How can I force QB to use the custom tax rate found in the recurring invoice templates so I don't have to keep manually updating them?

Hello there, bowmand.

I understand that it's really important to use the correct tax rate on every sales transaction.

Ideally, QuickBooks Online will use the rate that's being assigned on the recurring invoice template. As per checking, this has been escalated and is being fixed by our developers. 

You'll want to reach out to our Customer Support Team. That way, they can gather more details about this issue that can help this to be fixed as soon as possible. Simply go to the Help menu, select QuickBooks Desktop Help, then click the Contact Us.

I appreciate the workaround you've done. After contacting our Customer Support, you'll receive updates about this issue through email.

I'll be here if you need more help. Looking forward to assisting you again.