We are located in Nashville TN and collect TN sales tax. TN is an origin based state so we should be charging 9.25% (7% state + 2.25% local). We have sales tax turned on in QB Online. We shipped product to a customer in Memphis TN where their local tax is 2.75%--QB charged 9.75% and that's not correct, it should be 9.25% since TN is origin based. Can this be automatically sent to calc correctly on origin? It doesn't seem like I should have to review every invoice before it goes out and manually override the tax. Please let me know if anyone has any fixes etc?
I'm not sure you understand my question. TN is an origin state for sales tax, meaning sales tax should be based on our address, the sender of the invoice, but Quickbooks is basing sales tax calculation on the address of my customer the "shipping" address on my invoice. Why doesn't Quickbooks know that TN is an origin state and not a destination state--it's a very basic thing. It doesn't seem correct that I will need to modify/override every single invoice. That is just feasible. Please advise.
Allow me to share some information on how QuickBooks Online calculates sales tax.
When you add sales tax to an invoice in QuickBooks, the calculations are automatically taken care of. We calculate the sales tax rate based on date, location, type of product or service, and customer.
That said, QuickBooks calculates based on the location of sale or the "ship to" (destination address) you add in an invoice or receipt.
You can create a Product/Service item for shipping and mark it as taxable as a workaround. This way, the origin address will be followed. And when you invoice the customer, you can leave the shipping address blank. Then, the system will calculate base on the item entered or selected on the invoice.
Let me show you the steps:
From your left navigation pane, go to Sales.
Select Products and Services.
Hit the New button.
Choose product/service, then enter the needed details.
Click Taxable under the Sales tax category.
Press the Save and close button.
You might want to check these helpful resources for additional information about sales tax: