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DS127
Level 3

Sales tax rates - merge identical custom rates QBO

This seems like an easy question, but I'm not finding the answer.  I have a client where her QBO was set up with two custom rates for Sales tax.  They are identical, except for slight differences in name.  I'd like to have just one account bc every month when i do the ST, I have to add the amounts from each rate.  How do I do this? I imagine I then have to make sure that all the products/services point to the one account?  Thanks

 

7 Comments 7
Mark_R
QuickBooks Team

Sales tax rates - merge identical custom rates QBO

Hi there, @DS127.

 

At this time, QuickBooks Online (QBO) only allows you to merge customers, vendors, and accounts. As a workaround, you can consider changing the associated sales tax on each transaction to the one you want to keep. Then, inactivate the other sales tax rate you'll not be using. Let me guide you through the process.

 

First off, you'll want to run the Sales Tax Liability report to view all transactions associated with the custom sales tax rate. Here's how:

 

  1. Sign in to your QBO account. Then, click Reports from the left menu.
  2. Search for the Sales Tax Liability report.
  3. Select the reporting period when was the last transactions created that associated with the sales tax rate.
  4. Under the state department, click the amount to the sales tax rate you'll not be using.1.PNG
  5. On the Transaction report page, open each transaction.2.PNG
  6. From the Select tax rate drop-down, change the sales tax rate to the one you want to keep.3.PNG
  7. Click Save and close.
  8. Repeat steps 6 to 8 for the rest of the transactions.

 

Once done, you can now inactivate the custom rate you'll not be using.

 

  1. Click Taxes from the left menu, then select Sales Tax.
  2. Choose Sales tax settings.4.PNG
  3. In the Custom rates section, find the identical rate you want to inactivate.
  4. Under the Action column, click the drop-down and select Make inactive.5.PNG

After following the detailed steps above, you'll be able to work with one custom sales tax rate moving forward.

 

You might also want to know how QuickBooks calculates sales tax. Here's an article you can read for more details: Learn how QuickBooks Online calculates sales tax.

 

Keep in touch if you need more help with your sales tax, or if there's anything else I can do for you. Of course, I am always here ready to help you whenever you reach out. Have a great day!

DS127
Level 3

Sales tax rates - merge identical custom rates QBO

This is very helpful, I so appreciate it! Now I am seeing where the data are coming from.

It's going to take a bit of work to sort it out, but I get it.

 

Here's what I see:

There is a set of transactions done in 2020 where on the "Select Tax rate" (Invoice screen), it says, "Based on Location".  These are the ones pulling from the (custom)Tax rate called, Pennsylvania Sales Tax, which is the one I want to get rid of. (We will get the transactions changed to "PA Sales Tax", the other custom rate, which has many more transactions so is the one to keep.)

 

My question is, what do I do in order to get "Based on Location" to point to "PA Sales Tax"? This makes sense to our client, who has sales in several states. Then she wouldn't have to remember which custom tax account to use.

 

Hope that makes sense!  I don't suppose there is an easy way to fix a number of these in one fell swoop? Thanks much.

 

Mark_R
QuickBooks Team

Sales tax rates - merge identical custom rates QBO

Glad to have you back, @DS127

 

Allow me to provide additional information about how the Based on location tax rate calculated.

 

The Based on location tax rate depends on the address entered on the Location of sale field. You'll want to change the address on the field into a Pennsylvania address. This way, it'll automatically calculate the PA sales tax. Also, you can click the See the math link to check the sales tax calculation of Pennsylvania.

1.PNG

Please know that you still need to edit each transaction to change the sales tax rate. Here's an article you can read to learn how to automate your sales tax calculation: Use automated sales tax on an invoice or sales receipt.

 

I'm still open for your replies if you need more help with setting sales tax in QuickBooks Online. I'll be sure to get back to you.

DS127
Level 3

Sales tax rates - merge identical custom rates QBO

In the invoices, I see that Location of Sale IS a PA address.  But my problem is that when it sees the PA address in Location of Sale, it goes to the "Pennsylvania State Tax" custom rate, rather than the "PA Sales Tax" custom rate which is what i need.  Where do I tell the "Based on Location" which custom rate account to use? THanks!

MorganB
Content Leader

Sales tax rates - merge identical custom rates QBO

Hey there, DS127.

 

Thanks for following up with those additional details. I can show you how to use the custom sales tax rate in your QuickBooks Online account. 

 

If you'd like to use your custom tax rate when creating a new invoice, you'd need to click the drop down menu that currently says "Based on Location" and then select the name (PA Sales Tax) of the custom rate. This would need to be done each time you'd like to use the custom rate, as the default can't be changed when using Automated Sales Tax.

 

However, I was able to find a workaround that had previously been mentioned by another QuickBooks Online user. They stated to click on the "see the math" link underneath the amount shown for sales tax. It will bring up a side bar on the right that states "Customer tax details." You'll then want to click the pencil icon in the top right hand corner and either make this customer tax exempt or select the appropriate tax rate for that customer, location, etc. This will save the tax rate you wish to calculate per customer/individual and you won't have to change it again (unless your location changes). This will need to be done manually on each invoice for each customer but you only have to do this once. 

 

Let me know how things go after giving this a try. I'll be here if you have any other questions or concerns.

DS127
Level 3

Sales tax rates - merge identical custom rates QBO

That's brilliant. Thanks so much for your quick reply. Now, how do we get Intuit to allow a change as to which rate the the "Based on Location" / (in my case PA address) points to?

 

thanks again.

MorganB
Content Leader

Sales tax rates - merge identical custom rates QBO

You're welcome, DS127! It's great to hear this method will work for you.

 

Regarding the ability to change the sales tax rate related to "Based on Location," I'll do my part and pass your feedback along to the Product Development Team. As many upgrades and features releases are based on great suggestions like yours, it never hurts for you to submit feedback as well. This can be done by clicking the Gear icon in the top right corner, then select Feedback.

 

You can keep up with these kinds of changes to QuickBooks Online by checking out the QuickBooks Blog and by keeping an eye out on your email associated with your account. 

 

I'm only a comment or post away if you need me. Take care!

 

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