Sales Tax Not Calculating Correctly on mark up

Thank you for sending the screenshot, circletax1. I appreciate you providing that visual so we can better understand your concern with the sales tax calculation.

To summarize, QuickBooks Online calculates sales tax for each transaction based on the following parameters:

• The customer's tax exemption status
• The shipping and selling locations
• The type of product or service sold

If everything is set up correctly, the markup item is automatically taxable.

To get more insight into why the sales tax is showing as $356.61 for this invoice, click the See the math link under the sales tax amount. This will break down the full calculation including the agency tax rates and the taxable amount. 

On the same window, you will see a separate line for markup and its sales tax amount. It will also give you the option to override the sales tax amount. 

Let me share these articles with more information on how QuickBooks Online calculates and handles sales tax:

• Learn How QuickBooks Online Calculates Sales Tax
• Override Sales Tax On Transactions In QuickBooks Online

I'd be on the lookout in case you have follow-up questions, circletax1. You can also visit us again anytime you need anything when recording sales and other transactions. I'd be happy to help or point you toward useful resources related to QuickBooks Online.

I know where the calculations are coming from my question is why is it only calculating on what it thinks is taxable and how do I fix it.  When I check the little box that say taxable I need it calculating sales tax on that amount, not on the amounts it wants to charge tax on.

Thanks for your reply, @circletax1.

I'll add some details and route you in the right direction for support to help you sort out this issue with the sales tax calculation in QuickBooks Online.

As provided by my colleague above, there are different scenarios where the system will base its calculation. That said, you'll want to double-check to ensure that the sales tax setup is accurate for taxable customers and the product. This way, QuickBooks will calculate it accurately.

Once verified that it's correct but the issue still persists, I recommend reaching out to our QuickBooks Online Support Team so they can further investigate what's causing this problem. They can also guide you on a possible fix. Here's how:

1. From the Search tab, click Contact Us.
2. Enter your question and select Continue.
3. Review and select from the following: Have us call you, or Chat with us.

Moreover, I'll be adding these articles again where you can read more insights about how sales taxes work in QBO:

• Learn how QuickBooks Online calculates sales tax
• Understand and set up sales tax-exemptions in QuickBooks Online

You can get back to this post if you have other concerns or follow-up questions about handling sales taxes. I'll be around to provide further assistance.

Unfortunately none of this information is helpful.  I know how to set up a quickbooks file.  The customer is set up as taxable.  The Products are set up as taxable.  The system has decided not to charge sales tax on the mark up.  (The mark up is being calculated based on marking a billable expense on a bill and adding it to invoice.)  Nowhere is there a place I can select if mark up is taxable or not but why wouldn't it be attached to the item that is marked up (for example I have the product marked as taxable so the markup should be taxable as well).  On the invoices it doesn't even show the mark up it show just a total for the item.  Every place possible the tax box is checked yet it is not charging tax.

Also you might want to check when you give information out about how to contact your help line.  Step 1 doesn't even make sense.  Maybe try to change your copy and paste answer to say when you're logged into your account go to the top and click on HELP. Then at the bottom click on Contact Us.  Then you pick a topic and put in your question.   Then I can sit and wait to talk to someone that will then take my information again and send it to someone else because the front line people will not know how to fix my problem. 

How can I send an email to someone so I can submit several screen shots of my issue and it can go directly to a technical person and I don't have to explain it a dozen different times?

I understand you already reached out to our customer support team, circletax1. 

I can see the urgency of fixing your tax rate to ensure the calculation is accurate in QuickBooks.  

In QuickBooks, the tax rate calculation is generally based on the three factors shared by my colleagues above. 

Since the issues you encounter with tax rates remain unresolved, I recommend contacting our customer support team again. They have access to the latest information and can provide detailed updates on the situation. Additionally, they can assist you in resolving the tax rate issue by offering solutions and troubleshooting steps. 

Here's how to connect with them:

1. Click the Help menu in the upper-right-hand corner and click Talk to a human.
2. Type in "Talk to a human," then press Enter.
3. Look for I still need a human and click on it.
4. Choose Get help from a human.
5. Pick between Start a chat or Get a callback.

In the meantime, as a workaround, we have two options to address the issue. One is to create a custom sales tax, allowing you to apply the appropriate tax rate to the transaction. The other option is to overwrite the existing sales tax amount in the "See the math" section on the invoice, which will enable us to manually input the correct tax amount.

1. From your invoice, click the See the math hyperlink to see the breakdown of the taxes.
2. Click the Override this amount hyperlink.
3. Enter the Rate column, select Other as the Reason, then click Confirm. 

For complete information about sales tax in your QuickBooks Online (QBO) account, refer to these articles.

• Learn how QuickBooks Online calculates sales tax
• Set up and use automated sales tax in QBO

Feel free to ask any follow-up questions by commenting below. I'll be here until you're able to fix the sales tax rate calculation. Have a great day!

Did you find a solution yet? I am encountering this exact issue. I create a bill, mark the item as billable, a markup is generated, I check the tax box, and I include the customer information. I then create an invoice from the billable expense charge. The tax box is checked next to the item and next to the markup. The markup is automatically generated because the item is saved with a cost that is lower than the sale price. The invoice calculates tax only on the item, not the markup. When I click the see the math link, under the markup, it indicates a taxable amount of zero. It says "Uncategorized - standard rate applied." The item itself shows the full amount as being taxable and says "Standard rate." This caused me to collect insufficient taxes from clients and nearly caused me to remit an insufficient amount of taxes to the state. This is a serious problem.

I have found that the product category does not carry over to the invoice and with out the category it doesn’t know the proper tax rate. So, even though the tax box is checked on the markup, without the category the tax is not calculated. 
I have to copy my description and make a note of the totals, select the category (which deletes all the other information), paste the description back in and manual enter my costs and item numbers. Then it will calculate the tax. 
This really needs to be fixed. 

I have found that the product category does not carry over to the invoice and with out the category it doesn’t know the proper tax rate. So, even though the tax box is checked on the markup, without the category the tax is not calculated. 
I have to copy my description and make a note of the totals, select the category (which deletes all the other information), paste the description back in and manual enter my costs and item numbers. Then it will calculate the tax. 
This really needs to be fixed. 

I spent hours on customer service call. They can see the problem, and that it is glitch in Quickbooks, but they say they can't do anything to elevate the issue to a level of importance that would prompt a look and fix in their engineering department. I am leaving quickbooks because of this issue. Absolutely critical flaw in their system and they don't care. Be careful with the manual fix as well, I changed tax manually and then clicked save, it didn't work. I'm going to Zoho Books, highly recommend!

Manually adding the correct product category to the markup line is the fix. It correctly calculates the tax on the markup when the category is entered on the invoice. But this is slog work that should be a non issue. It’s a complete failure for QBO not to correct this issue. 

Is your item a bundle by any chance?    I'm having an issue where it doesn't increase the tax if you change the quantity on the bundle.  At forst I didn't realize what was going on and why my sales tax filing was always incorrect.   It's been a nightmare. I've paid a ton of penalties for being late trying to figure out where things went wrong.

Anyway, I wouldn't expect any decent response on here.  The QB team will not be of any help to you.  

I have reached out to support numerous times about this issue and it is still unresolved.

I noticed it at the beginning of 2023 when near the end of Q1 none of my invoices which used "billable expenses" as line items and a second line item with "markup" hidden from the customer had calculated the tax correctly.

I spent 4-6 hours that first day with support online and using screen share. they were supposedly going to elevate it but declared there was no issue on their end and they didn't know why my account wasn't working correctly.

Bottom line is the markup shows up as an uncategorized expense and the based on location sales tax calculator marks it as non-taxable, which is incorrect. the markup should match the line item's category.

It seems like a simple fix on the backend for the programmers in theory, if they think of it in that regard.

I looked for the discussion group that was created and I had posted in about this issue back then, but it seems to have been wiped from existence. I remember at one time, I had commented on a reply stating the issue had been resolved when obviously it has not.

I also spent many hours on customer support call and screen shared with them to demonstrate. Two different customer support team members confirmed with me that it was a glitch in their system but they didn’t have the power to elevate it to get it fixed with engineering. Because of this I left quickbooks and migrated my books to another accounting app. 

I thought about going on LinkedIn and contacting as many intuit engineers as I could to work around the customer support system they have in place that prevents this important issue from getting elevated to a place it could be fixed. I didn’t bother because I dropped quickbooks, but maybe that’s work a shot?

I thought about going on LinkedIn and contacting as many intuit engineers as I could to work around the customer support system they have in place that prevents this important issue from getting elevated to a place it could be fixed. I didn’t bother because I dropped quickbooks, but maybe that’s work a shot?

Hello, everyone. 

We appreciate you for dropping your concerns here in the thread. Please know that we hear your sentiments. I'll share further information about your experience with sales tax not calculating correctly.

The investigation of this issue has already been resolved and closed. However, since you're still encountering the same, I suggest performing browser troubleshooting steps. It can rule out the possibility of having issues with your browser. Know that browsers accumulate temporary internet files that can affect your browsing experience. Too many internet files can sometimes change how your QBO company behaves, resulting in errors when performing tasks. See the following keyboard shortcuts for suitable browsers to open a private window:
 

• Google Chrome: Ctrl + Shift + N
• Mozilla Firefox: Ctrl + Shift + P
• Safari: Command + Option + P

Check out this article for a step-by-step process on clearing your cache: Clear cache and cookies to fix issues when using QuickBooks Online.

After doing so and the issue persists, contacting our support team again is recommended to open a new ticket for investigation.

On the other hand, you can also visit this link for an understanding of prevailing sales taxes in any QBO transactions: Override sales tax on transactions in QuickBooks Online.

We're determined to help you get this sorted out as soon as possible. You can post here again if you have any additional questions related to the program. We've got you covered, and we'll get back to you. Take care.

Wow!!

This is not a browser cache issue. That is one of the first things we attempted when working with this issue over a year ago.

I have attempted to use Edge, Chrome, Firefox, and even Safari.

All act the same.

Why would your response be that this issue is resolved? It absolutely is not resolved.

Nope. Your customer service team (2 different people I demonstrated the issue for) admitted to me that it is a glitch in your code/system. Maybe the customer service tickets are closed/resolved for some other reason. Is there incentive for your employees to mark issues resolved? 

its not a browser issue. It’s a coding error in your system. If you can elevate it, you should. I am sure there are more people who have this issue just haven’t figured it out yet. If they have been under reporting their sales tax for multiple quarters and get audited quickbooks could have a legal issue on your hands.

elevate the issue to engineering if you can. 

If I am billed for a service from a vendor and then mark that expense as billable, enter the markup, check mark tax, and add the client it will be billed to the invoice I create for that client with that billable expense added will not calculate any tax for the billable expense or the markup for the billable expense as the neither has a product cate

neither has a product/service attached to them as they were a category detail not an item detail on the expense sheet

I recognize the significance of an accurate sales tax calculation for every business, joshbrown.

Upon checking, the investigation related to this issue is already closed. Therefore, I recommend contacting our Customer Care team to request a ticket and open a new investigation. They're authorized to check this matter and provide further assistance.

Here's how to reach them using your QuickBooks account:

1. Log in to your QuickBooks account.
2. Click (?) Help.
3. Select the Search tab and hit Contact Us.
4. Pick or enter brief details about your concern.
5. Choose a way to connect with our support: 

• Chat with us - start a conversation with support personnel.
• Have us call you - get a call back from the next available.

Please be reminded of our support's availability:

• QuickBooks Online Simple Start, Essentials, and Plus subscriptions: Available from 6 AM to 6 PM PT during weekdays. Then, 6 AM to 3 PM PT on Saturdays.
• QuickBooks Online Advance plan: Support is available 24/7.

I'll also include this article to help you better understand how QuickBooks handles your sales tax in the system: Learn how QuickBooks Online calculates sales tax.

I'm always here to assist you if you have more sales tax-related queries. You can always reply to this thread, and I'll help you in any way.

How many times am I supposed to contact support, sit with a tech that explaining the same issue time and time again. only to be told the issue needs to be elevated. Then the issue is never resolved.

Online here you are calling the issue closed, and having me contact support which is just a revolving door of what I just explained.

Meanwhile, others are asking the same questions. You claim the issue closed/resolved so that customers are blind to the issue.

how is the investigation closed? I still have a problem, others have a problem. Intuit has a major problem.

I'm jumping on here too I'm having the same issue. Support is zero help. I've even had a zoom meeting with a junior tax leader (which I thought was promising), but that was over a montha ago and we've had zero movement. My client is really upset and we need to look for another software that can handle this. He was currently using Nesutie (which could handle this no problem) but at a $20K per year price tag, he can't afford that. Does anyone know a software that can handle this issue?

I switched to Zoho books. I like it.