QuickBooks Online uses the Automated Sales Tax feature to calculate sales tax for your transactions. The program computes the total tax rate based on where you sell and ship the items, the product’s tax category, and tax-exempt status (customer).
We’ll have to enter the correct addresses for your customers on their profile. This is to ensure the accurate tax rate and the amount will show on the invoice or sales receipt.
Go to the New menu in the upper left and choose Invoice or Sales Receipt.
Fill in the field boxes with the right details.
Check the total sales tax at the bottom.
Select See the math or the total tax amount to open the Let’s calculate your tax rate window.
This will display a detailed breakdown of the sales tax.
If you wish to change the amount, click the Override this amount hyperlink.
Input the rate and pick the reason for changing the information.
Press the Confirm and Close buttons.
I've included a screenshot of how the screen looks like.
To check the owed taxes, run the Sales Tax Liability Report. Then, click on the amount to see the customer’s name. On the report, you’ll see the list of tax agencies and their related areas.
I’m adding some articles that can help with your future tasks. These resources outline the complete steps on how to set QBO to collect sales taxes, add tax categories to items, and other sales tax activities.
Thank you for the response, but I'm not talking about sales tax. Its income tax. the taxes we pay to municipalities for work performed in their cities. When we do 250-350 jobs p/year and about 30-50% of those jobs will be done in cities. the others will be done in townships that has no city income tax. How do we label/tag a job, when it is sold, that this job will have income taxes due to a city, and what city it will be due to.