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My tax exempt customers are still being taxed on invoices

Tax exempt customers that are resale and commercial are still being taxed on invoices from QBO even though the taxable checkbox is unchecked. 

5 Comments
QuickBooks Team

Re: My tax exempt customers are still being taxed on invoices

Hello, @akricker.

 

I'm here to help check this further for you and see why your tax exempt customers are still being taxed on invoices.

 

As I've replicated this here on my end, once a customer is set up to be non-taxable, when creating a transaction/s, it wouldn't include any taxes.

 

First, please ensure that your customers are set up correctly under the Customer information page. If your customers are still being taxed on invoices, it's possible your customers are set up to be taxable before creating the transaction/s.

 

  1. Click on Sales at the left pane.
  2. Select Customers.
  3. Select a customer.
  4. Click on Edit.
  5. Go to the Tax info section under the Customer information page.
  6. Un-check the box beside This customer is taxable.
  7. Click Save.

j1 non taxable.PNG

j1 tax excempt.PNG

However, if it's set up correctly and it's still deducting taxes, I suggest getting in touch with our Support Team to check and investigate this further securely. For the support's contact information, you may check it here: Contact the QuickBooks Online Customer Support team.

 

Please don't hesitate to add a post/comment below if you have any other tax concerns, I'll be always here to help you. Have a great day ahead!

Community Contributor *

Re: My tax exempt customers are still being taxed on invoices

I have a question that kind of relates to this. I was wondering the correct way to set up customers in QB Enterprise for sales tax. We currently have customers (re-sale customers) set up as a tax item for the specific city in our state with a non-tax, tax code and we have others that are set up as a tax item of reseller (instead of the city). Which way is correct? 

Moderator

Re: My tax exempt customers are still being taxed on invoices

It's nice to see you here in the Community, dhelland.

I'd be glad to help point you in the right direction in choosing the correct way of setting up your tax-exempt customers in QuickBooks Desktop.

 

You need to identify which customers are taxable and how much sales tax to charge when they make a purchase. In this case, you may want to speak with your State Tax agency to know if you need to report a tax to those state where the customer resides.

 

The following articles can give you more insights about sales tax in QuickBooks Desktop:

 

If you require more information about customer sales tax in QuickBooks, you’ll find detailed instructions by pulling up the article in your company file. Just press F1 on your keyboard.

 

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For additional help, you can also reach out to our QuickBooks Desktop Support.

 

  1. Within your QuickBooks Desktop, click Help at the top menu bar.
  2. Click Contact us.
  3. To route you to the correct support expert, we need to know what type of question you have. Give a brief description of your issue and click Continue.
  4. We’ll provide you a few options. You choose which one is best for you.

You can always get back to me if you need more information about tax-exempt customers in QuickBooks. I'd be more than willing to lend you a hand.

Community Contributor *

Re: My tax exempt customers are still being taxed on invoices

Thank you. The customers are all non-tax customers that have a reseller permit. Some of them are set up as

tax code: Non

Tax item: City we ship to

 

Some are set up as

tax code: Non

Tax item: Re-Sale

 

I think if they have a reseller permit and non-tax, they should be set up as "Non / Re-sale", but I wanted to verify that this is correct - thanks!

QuickBooks Team

Re: My tax exempt customers are still being taxed on invoices

Hello there, @dhelland.

 

I'd be glad to help guide you to the right support who will be able to check your taxes further.

 

In QuickBooks Desktop (QBDT), you can set up sales tax by following the steps provided in this article: Set up sales tax in QuickBooks Desktop.

 

However, to stay in compliance with the tax regulations, I highly recommend consulting with the state or with a professional accountant. This way, they'll be able to help guide you further about setting up your taxes accordingly.

 

Keep in touch if you have any other taxes concerns, I'll be right here available to help!