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teambrown
Level 1

How do I not have tax for shipping show and only sales tax on the product

I thought there was a place to turn off tax on shipping??
5 Comments
AlexV
QuickBooks Team

How do I not have tax for shipping show and only sales tax on the product

Let me share some details about taxes for shipping, teambrown.

 

QuickBooks Online uses the automated sales tax feature. The system will automatically calculate the taxes for you when you make a sale and it's based on the following:

  • Your customer's tax-exempt status
  • Where you sell and where you ship
  • Your service or product's tax category

 

The best option to add the shipping without the tax is to add it as a separate item. 

  1. From the Sales menu, select Products and Services.
  2. Select the New button, then pick Service.
  3. Fill out all the fields.
  4. Select Nontaxable on the Sales tax category drop-down.
  5. Click Save and close.

 

Once done, you can now use this item on your invoices or sales receipts.

 

You'll want to check this article if you'd like to know which states tax shipping costs and which don't: What Small Businesses Need to Know About Sales Tax and Shipping?

 

Leave a comment below if you need more help. Take care!

teambrown
Level 1

How do I not have tax for shipping show and only sales tax on the product

Thank you for the reply.  By doing the steps you outline above - will that now, on an invoice and sales receipt, not place tax in the tax on shipping area?

Rubielyn_J
QuickBooks Team

How do I not have tax for shipping show and only sales tax on the product

You're right, @teambrown.

 

Doing the steps provided by my colleague above will not place taxes for shipping when creating an invoice or sales receipt. 

 

Start by creating a service item. You can check the steps above for your reference. Then create an invoice or sales receipt using the item created. 

 

Here's how: 

  1. Go to the +New button. 
  2. Select Invoice under Customers.
  3. Choose the customer.
  4. Under the Product/Service section, fill in the necessary information and the item you created.
  5. Once done click Save.

 

I'll be adding this handy resource as your guide on how to modify the sales tax in QBO: Edit Sales tax.

 

You may also personalize sales forms to make them more appealing and professional-looking. Check out this article for the detailed instructions: Customize invoices and sales forms.

 

Click the Reply button if you need more help with managing your sales tax. I'll keep an eye on your response. Have a wonderful day.

teambrown
Level 1

How do I not have tax for shipping show and only sales tax on the product

I have attached a screen shot of what I'm speaking about .  This many times gets filled in once I place an item in a sales receipt or invoice that I receive tax on - it sometimes splits the tax between sales tax and shipping tax.  By doing what you suggest - it sounds like I would need to create a line item - but that should not have anything to do with it.   I just quit the Quickbooks Bookkeeping service because it was so horrible and the last person I spoke with there said it was easy to turn that shipping tax off - but maybe she was wrong - they were wrong about so many things.

Jovychris_A
QuickBooks Team

How do I not have tax for shipping show and only sales tax on the product

Hi there, @teambrown.

 

Let me clarify things about the option to have the shipping tax enabled/disabled.

 

When you click the See math link on the Invoice window, there's an option for you to add the shipping tax. Make sure that the Shipping from/to address is correct or manually edit it in the Your tax agency and standard rate section.

 

From there, you can choose Yes if the law demands you to add the shipping tax and No if not. Other states like Alaska, Delaware, and Montana usually disable this because they don't implement the sales tax.

 

I'll share this reference for more insights you can collect sales taxes in QuickBooks and add tax categories to your products and services: Set up and use automated sales tax in QuickBooks Online.

 

You can also run a sales tax liability report to check how much sales tax you owe in QuickBooks Online.

 

Please let me know or post a screenshot if you have other concerns with assigning or setting up sales tax. I'm always around to help. Have a great day!

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