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Intuit

Add a sales tax category to your products and services

Learn how to add a sales tax category to your products and services in QuickBooks Online.

Instead of manually calculating sales tax, let QuickBooks do the work for you. Add a sales tax category to your products and services to accurately calculate how much to tax your customers. Here’s how.

Step 1: Set up your sales tax

The rules on how to tax a product or service can change depending on what you sell and where you sell it. QuickBooks keeps track of those tax rules, so you don’t have to.

Here’s how to set up your sales tax so QuickBooks can determine the rules that apply to you.

Step 2: Find out what products or services needs a sales tax category

The taxability of a product or service can vary from state to state, and in some cases, city to city. Some specific products and services have special or reduced rates and fees.

If you’re not sure which category to use, check out what items need tax categories and why.

Important: If you’re still not sure which tax category to assign, don’t hesitate to ask your accountant for help. They have the best insights into what tax categories your items need.

If you don’t have an accountant, we can help find one near you.

Step 3: Assign a sales tax category to a product or service

When you’re ready, here’s how to assign your items to different sales tax categories.

  1. Go to the Sales menu, then select Products and services.
  2. Look for the item you want to assign a tax category to, then select Edit.
    Note: If you want to assign a tax category to a new product or service, here's how to add a new inventory item.
  3. Select the Sales tax category ▼ dropdown.
  4. Select Taxable - standard fee or Nontaxable.
  5. Select Save and close.

Assign a special sales tax category to a product or service

  1. Go to the Sales menu, then select Products and services.
  2. Look for the item you want to assign a tax category to, then select Edit.
    Note: If you want to assign a tax category to a new product or service, here's how to add a new inventory item.
  3. Select the Sales tax category ▼ dropdown, then select Choose a special category
  4. Select the closest category for the item, then select Done.
  5. Select Save and close.

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