Ohio Sales Tax for Services vs Tangible Items at Service Location

I’m here to clear up your sales tax concerns and help you create a sales tax group in QuickBooks Desktop (QBDT) so the amount matches in QuickBooks Online (QBO), RJ.

Before we proceed, please know that I've updated my answer and added some troubleshooting steps to address the issue. With the sales tax rate configured in QBDT (one tax group) and the online platform (two tax groups), the calculated sales tax amounts will be accurate for both programs.

In the desktop application, you can choose only one sales tax rate for the whole invoice. To manage two or more sales tax items for a single sale, you need to create a combined sales tax group by following these steps:

1. In QBDT, head to the Edit menu at the top bar and select Preferences.
2. On the Preferences screen, go to the Sales Tax menu on the left panel and select Company Preferences.
3. From there, click the Add sales tax item button to open the New Item window.
4. Click the Type drop-down and pick Sales Tax Group from the list.
5. Enter the item information in the Group Name/ Number field.
6. Fill in the Description field.
7. In the Tax Item column, click the drop-down and add Delaware County or Franklin County in each line.
8. Review the information.
9. Once done, press the OK button to save the sales tax group item.
   
   

When you create an invoice, make sure to select the newly created sales tax group from the TAX drop-down. This way, the correct rate is applied to the sales entry. Refer to this guide for more insights on how the desktop program handles sales taxes and tax codes: Set up sales tax in QuickBooks Desktop.

Additionally, these resources will guide you in resolving sales tax issues and managing various sales tax tasks in QBO:

• Sales tax in QuickBooks Online
• Set up and use automated sales tax in QuickBooks Online
• How to resolve common sales tax issues
  
  

Stay in touch if you have other product-related concerns or questions about sales taxes in the online platform and the desktop program. We're always ready to lend a helping hand.

@Rasa-LilaMThank you but I don't understand why you make the assumption to, "test if the sales item is damaged."  If I select either the Franklin County tax group or the Delaware County tax group in QBDT, they calculate the tax amount as expected, either at $14.00 or $15.00.  This doesn't seem to indicate anything is damaged.  The discrepancy is caused by the fact that I cannot apply one tax group to the service item and a different tax group to the inventory item as QBO does.  Are you suggesting that not being able to apply different tax groups to different invoice items in QBDT is a design flaw with QBDT?

Thanks for following up with the Community, RJBreneman. I appreciate your detailed information.

When a sales transaction has multiple tax rates, you may need to show the different rates separately on your printed sales form. For these scenarios, Intuit recommends using a subtotal item and multiple tax items in the sales form.

Initially, you'll need to set up sales tax items to display multiple rates.

Here's how:
 

1. In your top menu bar, go to Lists, then Item Lists.
2. From the Item List window, right-click anywhere and choose New.
3. Pick Sales Tax for your item type.
4. Enter the Sales Tax Name, Description, Tax Rate (%), and Tax Agency information.
5. Select OK and repeat these steps to enter as many sales tax items as needed.

Next, you can create a subtotal item:
 

1. From your Lists menu, access the Item List.
2. In the Item List window, right-click anywhere and choose New, then pick Subtotal for its item type.
3. Enter your Item Name/Number and Description details.
4. Select OK.

After creating the subtotal item, you'll be able to create your invoice using multiple sales tax items.

I've also included a detailed resource about working with sales taxes which may come in handy moving forward: Process sales tax adjustment

Please don't hesitate to send a reply if there's any additional questions. Have an awesome Friday!

Were you able to get an answer to this question?  Curious as to what your findings were.

I can provide clarification on how QuickBooks Online (QBO)and QuickBooks Desktop (QBDT) manage taxes in a single transaction, Sahra23.

As mentioned above, applying multiple sales tax rates to different items on a single invoice is not natively supported. QBDT allows only one sales tax group or rate to be applied to the entire invoice.

In the meantime, you can make two separate invoices with the said tax rates:

1. Generate one Invoice for the service items being taxed at Delaware County's tax rate (7%).
2. Make a second invoice for the inventory items being taxed at Franklin County's tax rate (7.5%).
3. You can add details in the Memo field, then save.

Alternatively, you can consult a tax professional for other methods and to help ensure proper tax reporting.

To get more insights into how the QBO platform calculates taxes on each sale, check this article: Learn how QuickBooks automatically calculates sales tax.

If you have more questions, reply to the thread.

Just getting back to this.  I don't think this is correct.  I don't what to tax the sale at both Franklin AND Delaware county rates.  To emulate what QBO is doing, I want to tax one item at Franklin county rate and the other item at Delaware county rates.  Probably the later response about creating two invoices is the only way to do that?  More probably, taxing the two items at two different tax rates the way QBO is doing is wrong and I don't want to emulate that in Desktop.

I became more concerned that AST in Online for Ohio was wrong - that the inventory part and the service should both be taxed at the address where the service was performed and where the tangible property was received. I have multiple sources from Ohio Revised Code, Ohio Administrative Code, and Ohio Department of Taxation that specify things like
1. "When tangible personal property is received by the purchaser at a location in this state, the sale is sourced to that location."
2. "Sales of tangible personal property are sitused to where the customer receives it."
3. "Ohio law requires sales tax to be collected based on where the consumer takes possession of the product, not where the seller is located."
I probably should create a support ticket about it, but I haven't been getting any complaints so I haven't messed with it.