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Cold Springs Storage
Level 2

Sales tax outside of city limits

Our sales office and business are outside of the city limits.  Suddenly, QBO is adding the 2% city sales tax to the 6.25% Texas sales tax rate.  I need to NOT use the city rate, just the state rate.  How can I turn off the city portion so that customers pay the correct amount?

 

 

3 Comments
KhimG
QuickBooks Team

Sales tax outside of city limits

Thanks for dropping by the Community, @Cold Springs Storage.


I’m here to share some information about sales tax in QuickBooks Online.


The new Automated Sales Tax feature calculates taxes base on the following information:

  • The state you are registered to collect sales tax.
  • The physical address of the business.
  • Shipping address on the sales receipt or invoice.
  • Product mapping of the products or services you are selling.
  • Exemption status of the customer.

Make sure that the Shipping From and Shipping To address is correct so the system can collect the proper taxes from your customer’s sales transactions. Let’s verify by following the steps below:

  1. Create an invoice for a specific customer.
  2. Enter all necessary information.
  3. Put a check mark on the box under the Tax column. (Screenshots attached)
  4. Select the Sales tax highlighted in blue on the lower right portion of the invoice.
  5. On the Your tax agency and standard rate section, you’ll find the calculated sales tax. Click the pencil icon to edit the address.
  6. Update the Shipping from and Shipping to.
  7. Choose Save and continue.
  8. Hit Close.

 

 

 

Once done updating the address, your sales transactions should show the correct tax rate. Check out this article for reference: Sales tax in QuickBooks Online.


That should get you on the right track. 


Let me know how it goes once you tried the steps above. I’m always here to keep helping. Have a good day!

Cold Springs Storage
Level 2

Sales tax outside of city limits

No, this doesn't work.  We aren't shipping our "product".  We are a self-storage facility.  Certain storage units are taxable, others aren't.  So, for the taxable ones, we need it to only be 6.25%.  I did try adding shipping to/from, but it still said I needed to use 6.25% + 2%.  I added the actual physical address of our facility, which is outside of the city limits, and QBO still wants to add 2%

MirriamM
Moderator

Sales tax outside of city limits

Hello again, Cold Springs Storage.

 

I'm here to help share additional information about how the Automated Sales Tax feature works.

 

As mentioned by my colleague KhimG, QuickBooks Online calculates the tax rate based on multiple pieces of information, such as the physical address of the business and the address on the invoice/sales receipt. It is also in compliance with the IRS in which all tax calculations are automated to comply with the US. 

 

To further isolate the issue, I'd recommend contacting your state agency to verify the rate you've desired. 

 

For more information about how Automated Sales Tax feature works, you can refer below articles:

Keep me posted if you have any other follow up questions, I'm always here to answer it for you. Have a great day!

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