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Level 2

How do I set up sales tax and with options for multiple rates?

Thanks to a recently passed law, graphic designers in Pennsylvania now have to charge sales tax for the first time ever. To make matters worse, the law makes it so the rate is variable depending on where the customer is located: 8% for Philadelphia, 7% for Allegheny County (Pittsburgh) and 6% everywhere else in the state. In my situation, my clients will all fall under the 6 or 7% tax.

I went to Preferences > Sales Tax and checked "Customers are charged for sales tax" as I've seen other suggest. Beyond that, I'm not finding instruction on what to do next.

When I tried to create an invoice, I now have a Tax Item drop-down box on the bottom right, but the drop-down menu is blank. The text rate is set to 0.00% and is not editable. I don't see where to set up that 6 or 7% sales tax.

I charge by the hour, with various standard, rush and weekend rates in my Item List applied to a time sheet. I see when I edit those Items that there is a check box to make them taxable, but, again, I don't see where to set up the sales tax amount.

Any help would be appreciated.

Solved
Best answer December 10, 2018

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Highlighted
Level 2

How do I set up sales tax and with options for multiple rates?

It is not too difficult.  It sounds like you turned on the Sales Tax system within preferences.  You now need to set up sales tax items for each for the taxing jurisdiction and tax.  For example here in SC we have a state sales tax and then local county options.  Thus I would set up a tax item for the state tax (6%) and then the local options for each county we due business in (say 1%).  

Then you will set up tax groups to get the combined rate for the various counties.  For example here in Richland County, SC we have a state tax and two different local options (Transport 1%, local Opt 1%).  I have a tax group called Richland Cnty that has multiple tax items for a total of 8%.  

If you don't need all the detail to report your taxes you could always simply set up an item for each country and enter their rate, but I always suggest people take the extra step to set up the groups to have the detail and make it easier to manage if rates change.

You will also need to go in to each of the items you bill and set them to taxable.

You can then go into the customers and assign them to default taxing groups.

Once you do that when you bring up a customer it should have their default tax information.  If not you can select the correct taxing groups when you do the invoice.

Hope that helps.

View solution in original post

16 Comments
Highlighted
Level 2

How do I set up sales tax and with options for multiple rates?

It is not too difficult.  It sounds like you turned on the Sales Tax system within preferences.  You now need to set up sales tax items for each for the taxing jurisdiction and tax.  For example here in SC we have a state sales tax and then local county options.  Thus I would set up a tax item for the state tax (6%) and then the local options for each county we due business in (say 1%).  

Then you will set up tax groups to get the combined rate for the various counties.  For example here in Richland County, SC we have a state tax and two different local options (Transport 1%, local Opt 1%).  I have a tax group called Richland Cnty that has multiple tax items for a total of 8%.  

If you don't need all the detail to report your taxes you could always simply set up an item for each country and enter their rate, but I always suggest people take the extra step to set up the groups to have the detail and make it easier to manage if rates change.

You will also need to go in to each of the items you bill and set them to taxable.

You can then go into the customers and assign them to default taxing groups.

Once you do that when you bring up a customer it should have their default tax information.  If not you can select the correct taxing groups when you do the invoice.

Hope that helps.

View solution in original post

Highlighted
Level 2

How do I set up sales tax and with options for multiple rates?

Thank you so much! This was precisely what I needed to know.
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Anonymous
Not applicable

How do I set up sales tax and with options for multiple rates?

Where do we change county tax rates at?
Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

I actually did set up all the groups for the tax rates but it is still giving me a 0% even though the total should be 6.875 + .25 + .50 It should be more than zero.
Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

Did you assign the tax group you set up to the customer?   I have to go into each individual customer record, select the "sales tax settings" tab, then enter the tax group in the "tax item" field.  

Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

when i click view solution nothing shows up.

Highlighted
QuickBooks Team

How do I set up sales tax and with options for multiple rates?

Hi there, browjo,

 

The View solution in the original post hyperlink is the reply that is marked as Best Answer in this thread. It's next to the main post.

 

From what I'm getting, Frank Cahoon talked about creating sales tax items per state or taxing jurisdiction. Then, group taxes for counties. This article has detailed steps for setting up individual and group taxes: Set up sales tax in QuickBooks Desktop.

 

Please feel free to go back to this thread if you have additional questions.

Highlighted
Level 3

How do I set up sales tax and with options for multiple rates?

It is not very clear hot wo set multiple tax rates to a jurisdition or agency.  How do I activate the tax center?  I have 3 tax levels for a one specific jurisdiction and agency.  I amusing QBO Plus

Highlighted
Moderator

How do I set up sales tax and with options for multiple rates?

Thanks for specifying that you're using QuickBooks Online, jecalderon.

 

Automated Sales Tax in QuickBooks Online calculates the sales tax based on the following:

  • Customer’s tax exempt status
  • Bill To and Ship To addresses
  • Item’s tax category

When you set up sales tax make sure you enter the other agencies you want to be part of the calculation. You can follow the step by step process in doing this: Set up and use automated sales tax in QuickBooks Online.

 

If you missed an agency and want to add it, you can follow these steps:

  1. Select Taxes on the left menu and go to the Sales Tax Center.
  2. Click the Sales tax settings in the upper-right of the page.
  3. Click the Add agency button and enter the agency information.
  4. Select Save.

You can also use this link for more information about adding the agency: Set up where you collect sales tax in QuickBooks Online.

 

We're always right here if you have additional queries about the sales tax. 

Highlighted
Level 3

How do I set up sales tax and with options for multiple rates?

But this is not an answear to my issue.  Here the scenario is that an agency has multiples tax categories.  Therefre, is useless looking for Other tax agencies to set multiple. Taxes.

 

Can jurisdiction be configure to use multiple tax rates?  So far, I find nothing to address this scenario.

Highlighted
QuickBooks Team

How do I set up sales tax and with options for multiple rates?

Chiming in to share additional details about sales tax, jecalderon.

 

As mentioned by JamesDuanT, there are factors we need to consider on how QuickBooks calculates the sales taxes. In automated sales tax, we're unable to set up a tax rate since QuickBooks will be the one to identify its rate based on those factors. Please read this article for more details: How QuickBooks Online calculates sales tax.

 

When recording a transaction, you can review the tax calculation. You'll see the See the math link below the Subtotal. When you click it, you can see the calculation and the tax rates. As long as the details you enter are correct, QuickBooks will calculate properly and correctly the taxes.sales tax.PNG

You can refer to the same article shared by my colleague on how to set up use automated sales tax in QuickBooks Online.

 

Please reply again if you need more help with this. I'm always here to help you.

Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

I deliver waste containers to multiple sites and sometimes one contractor has multiple sites just under one company. Each one is a different tax rate in multiple Cities in our one area. How in the world can I just enter it myself each time OR have a drop down for each City with their own tax rate? Please help! 

Highlighted
Moderator

How do I set up sales tax and with options for multiple rates?

Hello there, denise35,

 

You can use location tracking to internally track these transactions. However, you'll want to select the tax rate every time you create one.

 

Note that class or location tracking is only available in QuickBooks Online Plus and Advanced. Check this article to set it up: Turn on class tracking in QuickBooks Online.

 

Here's an article for reference: Track your transactions by class.

 

You can also run reports by class.

 

Let me know if you have more questions.

Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

How can I revert back to just selecting or inputting the tax rate for each City each time?

Highlighted
QuickBooks Team

How do I set up sales tax and with options for multiple rates?

Hi @denise35,

 

At this time, there isn't an option to revert to the previous Sales Tax Center once you switch over to the automated version. 

 

I understand that we have other users, alongside you that want to have this option available. With that said, we'll be taking note of this.

 

if you wish to file and pay your sales tax return within QuickBooks Online, take a look at this article: File and pay your sales tax return. It also includes a few steps on what you can do whenever you receive an error while attempting to pay your sales tax return.

 

I'll be around in case you need help. Place a comment below, and I'll get back to you. 

Highlighted
Level 1

How do I set up sales tax and with options for multiple rates?

so this doesnt really  help and its been a crap storm for years now and quick books still wont fix this crap tax automation issue. its clearly written in here that this is a problem.  I also work under several city, county, state, federal and tribal jurisdictions and Quick books covers none of them. It sticks me and all other businesses under the jurisdiction of the State of South Dakota, which we tribes do not answer to the state. We answer to our tribal government and we pay taxes to our tribal government. We have different tax rates such as excise, contractor, use and sales tax

not only cant i add these jurisdictions, i can't do anything with quickbooks whatsoever because of this. It keeps jacking up my invoices and even when i deleted my initial invoice it wouldnt let me do anything and even if it did, the numbers are wrong because of Quickbooks not fixing this issue. 

I dont like your automated tax, nobody does. We need an option to implement this ourselves. Quick Books online thus far sucks butthole. I tried it back in 2015 and i quit because of this same issue. Nothing has changed. 

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