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DS127
Level 3

Automatic sales tax not giving correct county rate

I am helping a client set up his QBO. He provides product at the client's site and thus has to collect sales tax depending on the client's address.  The rates differ by county.

 

I was expecting that as long as we have the Ship To address for the client set up, and the invoice saying "Shipping to" their address (BTW, I had to type this in, why can't I use the Ship To address associated with the client), then the tax rate, "Based on Location" would be correct.  In "Do the Math", it shows the wrong county, thus the wrong rate.  

 

Why is this so, and how do I get QBO to use the correct county rate?  Thanks!

I've read all the articles (esp Set Up Sales Tax and many posts about sales tax and this is not addressed.)

Solved
Best answer April 19, 2021

Best Answers
AlexV
QuickBooks Team

Automatic sales tax not giving correct county rate

Hi DS127!

 

Thanks for the reply and I appreciate the things you've done.

 

QuickBooks Online will calculate your sales tax based upon the address inside the Shipping From / Location of Sale field. What I can suggest is to use the USPS Zip Lookup Tool to validate your address. This is to ensure that the most accurate amount of tax is collected. 

 

Here's the article on how to use the tool: Validate an address for taxes.

 

Also, please note that some states require sellers to charge tax based on business location. You can verify this with the State of Ohio. Though, you have an option to override it. On the Let's calculate your tax rate window, simply click the Override this amount link.

 

Additionally, I've added more links on how QuickBooks Online calculate the sales tax: 

 

Keep on posting here if you need more help. I'll be here!

View solution in original post

4 Comments 4
AlexV
QuickBooks Team

Automatic sales tax not giving correct county rate

Hello DS127!

 

You're right! One of the factors in the sales tax calculation in QuickBooks Online is the address. I'm here to share more details about it.

 

Once you entered the shipping info in the customer's profile, it'll auto-populate when you create a sales transaction. It's also one of the basis to determine the rate.

 

You'll want to verify if the company address is correct. Go to the Gear icon, select Account and settings, and review the Address section on the Company tab. Next is the customer's shipping address.

  1. From the Sales menu, select Customers.
  2. Click the customer's name, then Edit.
  3. Make sure the Shipping address is correct. Tap Save.

 

If the same thing happens, let's see if this is something related to the browser. A too much-stored cache can cause the browser to behave differently. We can use a private browser since it doesn't keep track of your browsing session.

  • Google Chrome: Ctrl Shift + N
  • Safari 11 or newer: ⌘ Shift N
  • Mozilla Firefox: Ctrl Shift P
  • Microsoft Edge: Ctrl Shift 

 

You may also clear the cache to fix errors in QuickBooks Online. Lastly, make sure to use an up-to-date browser.

 

I have some articles you can check. These will discuss more on how to use the automated sales tax:

 

Keep on posting here if you need more help. We'll respond as soon as we can.

DS127
Level 3

Automatic sales tax not giving correct county rate

Hi,

I did all of what you said, AlexV.

I verified the customer addresses (bill to and ship to).  (Brooklyn, OH which is Cuyahoga County.)

I verified the company address (Mahoning County).

I logged in incognito so that cache would not be an issue.

 

I created a new invoice with that client.  I have the Shipping To address correct (Brooklyn, which is 2.25% on top of 5.75% OH state tax) = 8.00%  I click on the Based on location box so that the tax calculates. I'm attaching the See the math.  It is still using Mahoning County tax rate, which is the rate of the company (seller)., 7.25%.

Why isn't it correct?  Thanks!

AlexV
QuickBooks Team

Automatic sales tax not giving correct county rate

Hi DS127!

 

Thanks for the reply and I appreciate the things you've done.

 

QuickBooks Online will calculate your sales tax based upon the address inside the Shipping From / Location of Sale field. What I can suggest is to use the USPS Zip Lookup Tool to validate your address. This is to ensure that the most accurate amount of tax is collected. 

 

Here's the article on how to use the tool: Validate an address for taxes.

 

Also, please note that some states require sellers to charge tax based on business location. You can verify this with the State of Ohio. Though, you have an option to override it. On the Let's calculate your tax rate window, simply click the Override this amount link.

 

Additionally, I've added more links on how QuickBooks Online calculate the sales tax: 

 

Keep on posting here if you need more help. I'll be here!

View solution in original post

DS127
Level 3

Automatic sales tax not giving correct county rate

AlexV, you have solved the mystery!!!!

Ohio charges sales tax based on location of origin of sale.

 

No kidding. That was a great idea to check. And after all the docs I've looked at (incl /esp OH Dept of Taxation). I made the mistake bc the product sold is taken to the premises of the buyer (in a county different than the office of the seller).

 

I sure hope others can learn from this!

Thanks for staying with me, AlexV!

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