Sales tax and Square Integration

Hello, gwmtreas. I understand that you are experiencing difficulties with the sales taxes on the downloaded transactions from Square.

As long as the sales tax codes are completely identical between Square and QBO, the sales taxes will be automatically mapped to the correct account.

You mentioned the item names are already similar for automatic matching. However, the items in QBO do not specify if they are taxable or not.  

It's important to keep in mind that the sales tax settings need to be the same in all aspects. This includes the name of the tax and the agency. Even minor differences or variations in the sales tax codes can cause discrepancies when generating sales tax reports in QBO.

To verify, you can compare the Sales Tax setup by logging into both the Square website and your QuickBooks Online account. You can also follow these steps on how to check the app settings in QBO:

1. Go to the Transactions menu and proceed to the App Transactions tab.
2. Click App settings in the right-hand corner. 

You can read more details about Square and QBO integration in this article: Connect Your Square Account To QuickBooks Online.

Please feel free to reach out if you have any other questions or if we can assist further in resolving your QBO sales taxes for these imported transactions, gwmtreas. The Community forum is always available to assist.

My understanding (and I may need to be corrected on this) is that all the reports related to sales tax in Quickbooks (including the sales tax liability report) will work only if you are using the Automated Sales Tax (AST) feature of Quickbooks. From what you described, it appears that in your setup, you are currently letting Square calculate and add the right amount of sales tax for each order and then adding a new item to every invoice with the name "Sales Tax Item" in QBO. QBO probably cannot understand that this is the sales tax you collected on each transaction and, hence, can't appropriately classify this in the tax liability report. 

Here are a few alternatives/workarounds I can think of:

1. See if Square provides any in-built sales tax liability reports that can be used directly while filing state-wise returns. 

2. Consider using an online sales tax filing service like Galvix that can directly import the transactions/orders from Square and create the draft returns for each state for your review and approval. Once you approve, Galvix converts the data into the required reporting format for each state (e.g. breakdown by county/city, type of products/charges, etc.), and auto-files the returns for you every month/quarter, while providing you with an acknowledgement copy for future reference. 

I hope this helps. 

@gwmtreas 

Another option, explore this connector to reconcile your Square transactions into QBO.

https://partnerstack.synder.com/quickbooks