cancel
Showing results for 
Search instead for 
Did you mean: 
Reel74
Level 1

Automated sales tax is choosing the wrong taxing agency

The company address is correct, as well as the state sales tax, however the automated sales tax feature is taxing based on the city tax rate and not on the county rate where we are located according to the comptroller office. The option "Shipped to Customer is" off. The city tax is 1% lower than the county tax - how can I get it to recognize the correct taxing agency? Or conversely to have invoices default to the custom tax rate which is correct. Currently, we have to manually calculate tax and manually calculate sales tax returns as all the information generated the automated tax feature is incorrect. We file on an accrual basis.

4 Comments 4
ChristieAnn
QuickBooks Team

Automated sales tax is choosing the wrong taxing agency

Hi there, Reel74.

 

QuickBooks Online calculates the tax rate based on multiple pieces of information, such as the physical address of the business and the address on the invoice/sales receipt. That's why your automated sales tax feature is taxing based on the city tax rate. For additional insight into this feature and steps to see how the rate is being calculated: Set up and use Automated Sales Tax

 

However, I can see that you already said that the company address is correct, I still suggest changing or making sure that you entered the correct address on where you sell your products. This way, you're able to ensure that the automated sales tax feature is taxing based on county rate or on the rate you want to calculate.

 

 

 

On the other hand, there's no option to make the invoices default to the customs tax rate. That said, once you've set up your custom rates, you'll have to manually select the location.

 

Here's how:

 

 

  1. Create an invoice or sales receipt
  2. Click the small arrow icon next to Based on location.
  3. Select your custom rate from the list. If you need a new custom rate, select + Add rate.
  4. Make sure the total tax amount is correct.
  5. Click Save, or Save and send to email your customer their invoice or receipt.

 

Please take note that you can only use one custom rate on a transaction. If you need to charge multiple tax rates, set up a combined rate first.

 

As you start using custom rates, it’s important to review what you owe from time to time. You can run the Sales Tax Liability report in QuickBooks. This makes sure everything is accurate before you file your return to your tax agency.

 

Should you have any questions about sales tax, or anything QuickBooks related, I'm just a post away. Hope you have a good day.

Fiat Lux - ASIA
Level 15

Automated sales tax is choosing the wrong taxing agency

@Reel74 

As an additional option, explore this AST Filing & Reporting app. You may find something useful.

https:// taxjar.grsm.io/mytax

 

Reel74
Level 1

Automated sales tax is choosing the wrong taxing agency

All the information is correct.  The automated sales tax use to calculate correctly. However, a couple of months ago that changed, and now it using the metro agency. I think the problem is that our zip code is primarily in the county but a portion of it is located in the metro area and QuickBooks is defaulting to the metro area.

Jessica_young
Moderator

Automated sales tax is choosing the wrong taxing agency

Thanks for being a part of the Community, @Reel74.

We have a new sales tax feature that looks at a variety of information to calculate your sales tax.

 

•    The state where you have nexus and are registered to collect sales tax
•    The physical address of your business.
•    The physical address on the sales receipt or invoice
•    The product mapping you have associated with the products or services you are selling
•    The exemption status of your customer

 

To start, let’s make sure that the company address is in the correct county so that the tax calculation is correct. Let me walk you through how to change the company address. 

 

1.    Go to the Gear icon, then select Account and Settings.

 

undefined 2.    Choose Company, click the Pencil icon beside Address.

undefined

3.   Enter the  Company address.

4.   Hit Save, then Done.

undefined
 Once done, let’s set up the Sales tax in your account. Let me show you how:

 

1.    From the Taxes menu, select Sales tax settings located in the upper right corner.

 

undefined

2.    Choose Add agency, under Agency locate Arizona and in the Filing frequency box choose a tax period.
3.    Hit Save.

 undefined

 

After that steps, let’s create a sample invoice to check if the address and tax is saved.

 

Here’s how:
 
1.    From the Plus (+) icon, select Invoice under Customers.
2.    Select the Customer’s name and enter the email.
3.    Under Product and Service, choose the product and enter an amount.
4.    Make sure that box under Tax is checked, then click the see the math link below the Sales tax amount.

undefined
5.    From the pop-up window, under Your tax agency and standard rate, verify if the amount is correct. If you have another rate, you have an option to Override the amount. I've attached a screenshot for your reference.

 

 

For more details on how to make active or inactive a tax agency, you can always visit this related article below: Set up and use automated sales tax. 

 

If you have additional questions, I'm just a post away. Happy holidays!

 

Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up

Need to get in touch?

Contact us