QBO Automated Sales Tax (AST)

woatm74@gmail.co · ‎September 04, 2024

1. Does the tax code automatically change without using the invoice or estimate API?
2. Currently, we are limited to Texas, but if we expand to multiple states, will additional registrations be required for tax calculation?

MAnneJ · ‎September 05, 2024

Yes, the updated rate will also change in QuickBooks, Woatm74. I'll explain it further.

Once the government changes the tax rate, QuickBooks will automatically update it. However, it will depend on when it'll take effect. If it updates automatically, and you still wish to use the previous rate, you can create a custom rate through Sales tax settings.

Here's how:

Go to Taxes, then select Sales tax settings.
Under custom rates, select Add rate.
Choose Single or Combined.
Enter the name in the Name field.
Click the agency from the Agency ▼ dropdown menu.
Enter the rate in the Rate field.
Select Save.

Additionally, you can refer to this article and learn that QuickBooks can calculate sales tax for you on invoices and receipts: Set up and use sales tax in QuickBooks Online.

I'd be more than happy to assist if you have further questions regarding sales taxes in QuickBooks. Have a great day ahead.

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Carneil_C · ‎September 05, 2024

Thanks for your prompt reply, woatm74.

I'm here to address your concerns about taxes in QuickBooks Online (QBO) one at a time.

To address your first concern, most services can be subject to taxes, the system automatically determines the service items to be registered by the state. Thus, QuickBooks knows the tax rules wherever you run your business.

For the second question, yes, the Automated Sales Tax (AST) feature in QBO automatically determines if a service item is taxable in each state and calculates the appropriate tax based on the tax categories set up for the item. Just ensure you describe the product or service accurately so the system will determine whether it's taxable.

To learn more about how this is set up and used, check out this article: Set up and use automated sales tax in QuickBooks Online.

Moreover, this resource can guide you if you want to know more about identifying a tax-exempt transaction or customer from sales taxes: Understand and set up sales tax-exemptions in QuickBooks Online.

I'm more than willing to help if you have any other concerns with your sales taxes. I'll ensure your needs are taken care of.

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MariaSoledadG · ‎September 04, 2024

I'm here to elaborate on some details and guide you on how to use automated sales tax, WoatM.

QuickBooks Online (QBO) calculates the total sales tax rate automatically for each sale. When you create an invoice or estimate, the system directly applies the tax code based on the customer's tax-exempt status, where you sell and ship, and the type of products you sell. That's the reason why the tax code doesn't automatically change without the invoice or estimate API.

You can set up a custom rate or manually override the amount once you want to edit the amount in your invoice. I've added a screenshot for your visual guide:

Secondly, yes, you are required to register for sales tax collection in each state where you have a substantial presence or meet other criteria for sales tax nexus. When you sell to that state, you charge tax rates at the place where your product is going. Some states also require sellers to charge tax based on business location, even when you sell and ship to a different address in your state. You can reach out to the state agency for further guidance.

Moreover, I've added this resource to help manage your sales tax in QuickBooks: Edit sales tax rate in QuickBooks Online.

Let me know if you have any other concerns or tax-related concerns by dropping a reply below. I'll be one post away if you need further assistance.

woatm74@gmail.co · ‎September 05, 2024

Assuming that the **taxCode** and **taxRate** were registered through the **AST** (Automated Sales Tax) system under the same conditions at the time of registration, if the government changes the tax rate, would the updated tax rate be reflected in the response when querying the **taxCode** and **taxRate** API? Additionally, it is expected that the updated time value would reflect the point when the rate was changed.

MAnneJ · ‎September 05, 2024