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Level 1

Sales Tax and Tax Exempt

My boss and I have both been calling into quickbooks for several months now with problems regarding sales tax and tax exempt on our customers our old issue was that our customers that are tax exempt were being charged tax and finally by calling in many times and figuring out the issue we had no issues with that category on customers profiles until this week when he went to create an invoice for a  new customer that is taxable and by him check marking the sales tax button it still did not charge him tax because the drop down was empty and just said "enter text". Why is it that even if that box is checked we have to change the drop down as well? Shouldn't it do that automatically if you have them marked as sales tax? 

1 Comment
QuickBooks Team

Sales Tax and Tax Exempt

Hi there, Albany Taylor.


Welcome to the Community. Thanks for adding a screenshot of your concern. It gives me a clearer picture of the issue.


Based on the information, it looks like you’re using the Old Sales Tax feature. When setting up a customer (taxable), you still have to select the tax code from the drop-down.


This way, QuickBooks will be able to identify which rate to use when calculating the sales tax. However, if you want to set a default sales tax rate for all customers, simply configure the Sales Tax Settings.

 

  1. Tap the Taxes menu on the left panel and choose Sales Tax to open the Sales Tax Center.
  2. Go to the Related Tasks field section and click the Edit sales tax settings link.
    st1.png
  3. In the Edit Sales Tax Settings window hit the Default sales tax drop-down arrow and then pick the tax you want to use.
    st.png
  4. You can also select to Mark all new products and services taxable and Mark all customers taxable.

The new default rate will now show up on all sales forms. For more information, check out the Default customer sales tax rate in QuickBooks Online article.

 

It provides an overview of how to mark a customer as taxable as well as steps on how to run a taxable report.


Keep me posted if you have any other concerns or questions. I’ll be right here to assist further. Have a good one.  

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