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Level 1

How to setup a customer as tax exempt "out of state"

The option to make a customer tax exempt for the reason of "out of state" is no longer an option in the drop down menu under the Customer information > Tax Info tab. How do I make a customer tax exempt for the reason of Out of State. I am a small business and do not reach the Nexus Thresholds for shipping out of state. 

-Thanks 

 
 
4 Comments
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QuickBooks Team

How to setup a customer as tax exempt "out of state"

Hello there, @AIRAZONA.

 

There are two (2) ways to add tax exempt in QuickBooks Online (QBO).

 

If you're using the old Sales Tax Center interface, you can follow the steps below.

  1. Click Sales on the left menu and go to the Customers tab.
  2. Choose a customer profile and click Edit.
  3. In the Customer Information window, go to the Tax info tab.
  4. Make sure to put a checkmark in the This customer is taxable box.
  5. Enter the Exemption details.
  6. Click Save.

Capture 012358.PNG

However, if you are using the Automated Sales Tax, you'll have an option to exempt your customer from sales taxes.

 

Here's how:

  1. In the Customer Information window, go to the Tax info tab.
  2. Mark the This customer is a tax exempt box.
  3. Enter the Reason for exemption and the Exemption details.
  4. Hit Save.

Capture 333325.PNG

You can refer to these articles about sales tax exemption:

Please post again in the Community if you need anything else. I'm always here and ready to help.

Highlighted
Level 1

How to setup a customer as tax exempt "out of state"

Hi GraceC,

 

Thank you for the information however, this did not address my question. I asked specifically about being able to select "Out of State". It was an option in the drop down menu that disappeared last year. What does Intuit recommend I use for shipping out of state as I do not need to charge sales tax because I do not meet the Lexus thresholds. 

 

Thanks You!

Highlighted
Level 1

How to setup a customer as tax exempt "out of state"

Hi GraceC,

 

Thank you for the response however, this did not address my question. I asked specifically about being able to select tax exempt for out of state sales. Out of State was an option in the drop down menu last year and it is no longer available. What does Intuit recommend I use for out of state sales as they are tax exempt because I do not meet the Nexus law minimum thresholds. 

 

Thank you...

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Moderator

How to setup a customer as tax exempt "out of state"

Thanks for getting back in touch, @AIRAZONA.

 

The specific option for "Out of State", as you've noticed has been removed after an update to our Sales Tax system. The details provided above by my colleague will help mark a customer as tax exempt for all transactions. I see that this is an important feature to you and your business, so I'll forward this to our Product Development team for possible re-implementation in future updates.

 

In the meantime, I recommend checking out our blog to stay up-to-date on all things QuickBooks. Any future feature updates will be posted there, and we have some awesome content to share with you to help you with QuickBooks.

 

If you run into any other questions, I'd be happy to answer them. Have a great day!

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