Turn off "Based on location" sales tax feature

Hello there and thanks for posting here in the Community space, redbigfoot.

QuickBooks Online calculates sales tax based on location using the criteria below:

• Your customer's tax-exempt status
• Where you sell and where you ship
• What you sell

This is the reason why it is impossible to turn off the Based on Location tax feature. It is performing as intended. You'll have the option to set up a custom rate as an alternative if the third-party program doesn't have this default function.

Here's how:

1. Open the Taxes menu.
2. Click on Sales tax settings.
3. From the Custom rates section, choose Add rate.
4. Click on Single or Combined.

Once done, you can manually select the tax rates from the Based on location dropdown on the invoices created from the other system. Feel free to visit this link for more details: Use custom rates to manually calculate taxes on invoices or receipts in QuickBooks Online.

I'm also including the following useful guides to assist you to keep track of and manage your reports in QBO:

• Run reports in QuickBooks Online
• Customize reports in QuickBooks Online

If have further questions about taxes, please let us know. We're available to help you at any time.

Good afternoon!

Even with a custom rate set against the client, that rate isn't being honored. QBO keeps trying to use the "Based on Location" option. If I create an invoice directly from QBO, the custom rate is honored. But never if I push an invoice from the PSA.

The issue seems to be that QBO forces the "Based on location" option despite the custom rate when third-party invoicing is used. Can we force QBO to reliably honor the custom rate with third-party invoicing?

Thanks!

Hey there, @redbigfoot.

I appreciate you coming back and letting us know how those steps went for you and your business. 

I can see how beneficial this could be for your business. However, there isn't a way to force QBO to reliably honor the custom rate. 

I suggest submitting feedback to our Product Developers so they can consider this as an option in the near future. 

Review our Updates site to keep up with what's new in the system. 

I hope this helps answer your question. Wishing you and your business continued success! 

How is this an acceptable answer?  You are basically saying "too bad".  I used QB Desktop for years without any issues.  Now I have spent hours back and forth between Connectwise and QBO trying to resolve an issue that should be a simple enough fix on the Intuit QB programming side and is a big deal on your client's side.  I believe the issue is happening with my clients who have a tax rate of more than 2 decimal points.  On import, it seems to move that client to "Automatic Calculation and round the tax rate up to 5.19% when it should stay at the correct, assigned, custom rate which is 5.185.  I have had Connectwise review the export iif file that is being sent and it is indeed correct.  The issue is on the QBO import.  This is a glitch/bug/oversight/ whatever you would like to label it, that should be fixed.  I have and will continue to provide these details and this feedback to QBO in hopes that you will value your customer's business enough to make the fix. 
As a side note, I was told by a customer service rep on the phone today that QB does not care about their customer's issues and when he tried to escalate it on my behalf and read back the response from his supervisor it was evident that this was true.  I was given a phone number to call for the Developer team 800-871-3334 which asked if I was a QB customer, when I said yes, it simply told me my call could not be routed correctly and disconnected.  This is what has brought me here, in hopes that someone with some pull and some pride in their company would be able to escalate this correctly and resolve this issue for all the Connectwise users who are experiencing it.

I absolutely HATE the QB Online Tax Functionality. It causes unending grief and is horribly implemented. I hate it.

It's wrong. It computes the sales tax wrong 85% of the time and I think I'm being lenient in that estimation.

Horrible! The tax is incorrect. Seems to me that QBO SOFTWARE is making more mistakes than ever before.

I am having the same issue with QBO. I switched from QB desktop and now have to spend hours and hours trying to move the sales taxes onto their correct bracket. What a waste of time!!

For some reason QBO cant just take the sale taxes from our POS software and leave it alone, it moves into the incorrect bracket and causing us to report incorrect sales tax.

This Fu#$ing horrible. 

Please click on the gear icon and send a complaint to the developers. I am going to do this every day, if not they will ignore us.   

Please click on the gear icon and send a complaint to the developers, they won't help us unless we complain. 

Please click on the gear icon and send a complaint to the developers. I am going to do this every day, if not they will ignore us.  Please help other business owners who are pissed off!!! I switched to this from QB desktop since QB desktop does not get enough 3rd party support. 

QB is basically telling you that you are screwed and that they do not care if your sales taxes are reported correctly or not. I do not understand why they even created sales tax classes when they just do what they want. 

The programmers need to fix this!!!!

QBO does NOT calculate sales tax correctly...even if the invoice is created in QBO (vs a 3rd party system) and the "Ship To' address is entered correctly.

This causes MAJOR issues for YOUR customers because QBO calculates and reports the sales tax incorrectly, thereby resulting in YOUR customers reporting and paying sales tax inaccurately...which could then lead to audits and penalties with the State taxing agencies.

This is definitely a huge problem for YOUR customers and therefore should be a huge problem for QBO as well.

This is ridiculous. The only way around the issue to open all invoices and change the tax rate manually. Just one more thing QuickBooks Online does that makes no sense. Many of us are only using QBO because we can connect 3rd party apps to it. Moving to QBO is one of the worst decisions we've ever made. 

I have been sending several complaints through that gear icon as well!  Let's make some noise and maybe they will listen!  This can't be that hard to fix, give an option to let our third-party software set the rate and override QBO.  It worked FINE in desktop so you know they know how to make it work properly.

Yep, had a support person on the phone tell me we are a small company and our complaint would get no traction.  We should all keep flooding their support and suggestions with this till they fix it. 

QBO has saved me time with payroll and created issues for me with Sales Tax.  I can't even say it is a wash because the Sales Tax thing is a bigger headache now.  Ugh.

I totally agree with you, this is a huge tax liability and I can see a class-action lawsuit against Intuit one day. Especially for anyone doing business in California, CDFTA does not care you will have thousands if not 100s of thousands of dollars in penalty access against you if you do not report the sales tax correctly. 

I called many times about this and also left messages on the gear icon and their excuse is that is the limitation of QBO. I agree with you that this feature works fine on a desktop. I think this is a huge limitation and one that will cause a lot of sleepless nights for business owners. Just wait till someone loses a sales tax audit because of this limitation, there will be a lot of lawsuits coming. 

Is something else happening, other than QBO Based On Location not charging sales tax on markup?  They were supposed to work on it last night, but it's still broken.

They are always late to the party or do not show up at all. We need to keep bombarding them with requests to fix these items or they won't do it. Good luck. 

This is different from the issue being discussed here I believe.  We are having problems with QBO overriding the set tax rate in the software we use to create our invoices and setting it to "Based on Location" which is inaccurate as it is rounding the tax rate up and causing the tax rate to need to be manually fixed in QBO after synching invoices from Connectwise to QBO.  In this case, it is taking the actual tax rate of 5.185% and rounding to 5.19%

In addition, there are constant .01 discrepancies between the invoices in Connectwise and QBO.  We had both Connectwise and Desktop for years and it worked seamlessly without issue, since moving to QBO it has been a Sales Tax nightmare.

If they said they would work on and fix your issue you are several steps ahead of us with ours.  I send repeated requests for this to be fixed and get canned "thank you for your suggestion" emails back.

I keep checking to see if this "based on location function" can be shut off and I found this thread and had to ask ...@Candice C  Curious on this reply you gave?  It makes no sense...you do not grasp the user's complaint.  Submitting feedback is POINTLESS!! NO ONE AT QUICKBOOKS LISTENS TO THE USERS!!  Instead of fixing things the USERS want and NEED -you give us nonsense -that NO ONE CARES ABOUT!  Like the weird side bar menu changing or the invoices being "prettified" - no one cares! We do care that this tax function will not work as we need it to- or that we spend unnecessary time having to open up invoices and move the tax over to the function we need it to be.  Some companies - one I work with- uses the invoicing function within QB so it is easy to make sure the stupid tax button is where they want it at the point the invoice is created.  BUT other companies- like another I work with- actually use another program to invoice out of because QB is not capable of doing what the other software they use does- and then we merge it to copy into QB.  This merge is great except for the sales tax part- YES you guessed correctly if you think that the stupid QB tax setting WE CANNOT turn off messes it up- YES IT DOES!  It takes the tax setting already created on the invoice and decides to override it- because what ever is coded into this stupid inane tax setting tells my merged invoice that QB is right and the merged invoice (already sent to the client mind you) is wrong.  Which means I then have to open each invoice and wait for the system to open and scroll down and move the tax setting where it is supposed to be. (NOTE I am talking 20-50 invoices needing correction once the inane QB tax changing it)    Like @redbigfoot  stated- because while you can set up your tax settings how YOU NEED THEM AND WANT THEM this inane QB tax module overrides your data.   AS suggested by you- to make a complaint/submit feedback - I HAVE- NO ONE LISTENS!  The TAX FUNCTION is BROKEN!  

If other users, like me do not have their invoicing inside QB then they too may end up with batches of invoices to correct- which if one could do a batch setting then woohoo great- easy- but alas no- one has to do each invoice individually.  While on the subject of sales tax, and yes I HAVE ALSO SUBMITTED THIS for  YEARS now- QB doesn't even do the sales tax correctly for the State of WA- you neglect to solve for B&O but hey that's cool keep thinking the users are wrong and we need this tax setting set to on or else we can't function.  Like a service based business- in QB your tax system will tell a business- NO LIABILITY is due- because the system is not programmed correctly!  When in reality, a service based business in WA state has service tax to pay.  Oh and LOVED your comment-

"I can see how beneficial this could be for your business. However, there isn't a way to force QBO to reliably honor the custom rate. " 

Just great- tell @redbigfoot  you care and then basically, that what the user's want doesn't matter at all in the same sentence- in the south we call that "Bless your Heart"  not cool - instead - maybe YOU @Candice C  should submit to the product developers for all of us- hey you know a lot of users really want this functionality to work correctly can we get this fixed? Can we give them the ability to shut this function off? It seems most users hate it and it doesn't function for them.  - Just a thought. 

I wanted to bring to your attention an issue we are currently facing with the automatic sales tax migration from our BigCommerce web platform. The problem lies in the fact that the sales taxes are not correctly transferring to our new system.

Specifically, every sales receipt is defaulting to the "based on location" sales tax rate, which necessitates manual adjustments for each entry. This process is not only time-consuming but also prone to errors, as we need to ensure that the state's correct sales tax rate is reflected on each receipt.

Considering the efficiency and accuracy of our financial records, this situation needs urgent attention and resolution. If a solution cannot be found promptly, we may need to explore alternative accounting applications that can facilitate the proper migration of sales tax data.