In Texas sales tax is ONLY destination based if you go to another city/county and perform some services.
If you sell on line, then sales tax is origin based, you only collect sales tax for your city, county, state
Since it appears to be very complicated in Texas, perhaps use the app for sales tax called tax jar or alavara? They are both excellent for sales tax. They are an "add on" application but perform much better than the one recently embedded into QBO. If you need/use it and want it automated, that would be my suggestion. If you only need it sparingly, you can turn it back to the prior "classic" sales tax.
No avalara is useless in Texas as is Taxjar
Texas allows the business to decide if they will pay sales tax using cash or accrual basis - both software companies are ONLY accrual based sales tax with no option to change basis. Their laughable suggestion is to manually do the computations for sales tax payable if you are cash based, make adjusting entries in the sales tax payable account, then pay sales tax - and they want to be paid too. Explain that to an auditor!
Both software companies work off the ship to address, which is fine for those businesses who travel, but for stand alone or internet sales, that would require that you add in your own address as the ship to address, more work than needed
Sales tax works fine in QB for Texas based businesses
Texas is easy IMO,. cut an dried, collect sales tax for the place you physically do the work or make the sale. We used to have destination based sales tax for all, it was a mess to keep up with.
complicated> try California, or Louisiana, or
QB only uses the State Tax of 6.25% .
There is still local taxes that need to be incorporated..yes based on where you do the work. But in almost all places this is an additional 2%.
I have to manually change the 6.25% to 8.25% for every single transaction within QB.
Having the option to add an additional 'Local Tax' would be ideal.
Is there a way to do this?
Hi there, @Sandra Showalter.
Let me help show you how to add an additional sales tax in QuickBooks.
- Go to Taxes and click Sales Tax.
- Click the Add/Edit tax rates and agencies on your Sales Tax Center.
- Select New tab to add a new tax rate.
- Fill in the details on the New Sales Tax Rate window.
- Once done, click Save.
On your transaction form, you can select the correct sales tax rate by clicking the drop-down arrow for the sales tax field.
That should do it. I'll be here to help if you have other questions about sales tax. Have a good one.
Thank you, Lily.
However, I don't have these options available. As I had set it up to do the auto tax.
I was looking for a way to return to the classic tax system but can't seem to find it.
Right now, I do manually change the tax individually on every invoice.
Hi Sandra Showalter,
You're doing the correct way to override the tax amount. However, we don't want to stay in that way. For that reason, I would recommend contacting our our phone agents. They can do a screen-sharing session to check to see your setup. Also, they'll be able to check if it's still possible to revert your interface to manual sales tax.
Here's how to get their number:
- Open this link: https://help.quickbooks.intuit.com/en_US/contact.
- Click on Search for something else.
- Scroll down and click the Get Phone Number button.
If you need anything else, feel free to get back here.
I do... mobile computer and IT service... we were informed by the comptroller that we had to collect the correct sales tax rate for each city we serve... aka Addision, Dallas, Irving, Ft. Worth, Arlington, Granbury, Glen Rose, Weatherford, etc.
This has been my original COMPLAINT since I started this thread, and obviously I am not the only one... Unfortunately QBO support is not available on my "slow days" or down time. I'll schedule a play date to speak with support about fixing a problem that should not exist - if you would simply turn on the OLD SALES TAX methods
Hello there, Accounting40.
We're always striving to provide a good service to our customers. If overriding the sales tax won't work for you and you want to be removed from the auto sales tax feature, please get in touch with our customer support. As what my colleague @JessT said, they might find a way to revert you back to the old sales tax. Just follow the instructions on how to contact the support. The QuickBooks Online Customer Care is open from Mondays to Fridays at 6:00 am to 6:00 pm PST.
Feel free to post in the Community if you have other concerns.
I agree 100%. The new Automated Sales tax DOES NOT work for Texas. What's worse I have been told that if you are new to QBO and came on after the new Automated Sales tax you never had the option of using the Old system and, therefore, you cannot go back to the old system. You are stuck with a worthless program. Intuit, needs to give users the option of using Cash or Accrual basis and also to pick if you want to use the shipping address or the origin location to calculate sales tax. Somewhere Intuit got the misguided idea that Texas is an origin based state, and will only calculate sales tax based on the shippers location making it necessary to override the tax amount but then your sales tax reports are worthless because all taxes are still shown for the shipper's location. Taxes, however, need to be filed by City and/or county.
Thanks for joining the conversation, CASProfessional.
Let me share some insights about the Automated Sales Tax feature in QuickBooks Online (QBO).
You're right that new QBO users no longer have an option to manually enter sales tax. As mentioned previously, our workaround is to manually override the sales tax amount on each transaction. This will let you enter the correct percentage or amount on an invoice or sales receipt.
Let me show you how:
- Click the Plus sign icon at the top, then choose Invoice or Sales Receipt.
- Enter the needed information.
- Select the Sales tax hyperlink.
- Click the Override this amount link.
- Enter the details and click Close.
For more details about sales tax, please check this link: Automated Sales Tax Hub.
I'll definitely pass along your experience. Our engineers make improvements in QuickBooks Online by listening to our customers' suggestions and comments.
Thanks a lot for raising this concern.
That should get you back on track. Please let me know how that works for you. I'll be here and ready to help anytime. I'm cheering you to continued prosperity.
Just to add my two cents about non-texas problems. This doesn't work for me either in CT. It might if I were a straight retail outlet. The thing about QuickBooks is that the feature may not be in there for you but you can always work things around, that is until QuickBooks starts telling you how to do it the "correct" way.
Zeroing out sales tax for me doesn't work either because I need to classify my sales based on the client and the type of work I am doing for them. I have specific exemptions and CT makes you classify them all when you file; the new work automated thing doesn't let me classify exemptions so I have to look at each transaction and put it into an excel spreadsheet to calculate how much of each type I have. I used to just have a sales tax category for each exemption and have it at a zero rate, then it would automatically classify the sales in each field. This could all be resolved if QBO would stop locking down reports and let users create their own query of their data.
Don't create a feature that doesn't allow a user to think for themselves...its a great feature for people who don't know what they are doing otherwise but don't dumb down QBO so much that power users can't do it better.
"Somewhere Intuit got the misguided idea that Texas is an origin based state, and will only calculate sales tax based on the shippers location making it necessary to override the tax amount but then your sales tax reports are worthless because all taxes are still shown for the shipper's location. Taxes, however, need to be filed by City and/or county."
Let me add to that, somehow Intuit got the idea that it was too hard for simple sales tax users to assign their sales tax rate to their items and decided to create an automated system that I am sure nobody actually wants, or needs, and not allow people to use this "feature." I think sales tax is either very simple or very complex for everyone meaning there is no one size fits all automation - SCRAP IT.
Just so that others from Texas who read what you said do not misunderstand.
Texas is origin based, sales tax no matter where you ship to, is calculated on your location
IF, If you go outside your area for a service, that is when destination sales tax kicks in and you collect sales tax for the city, county, state you actually preform the service in
Automated Sales Tax is a nightmare. I am in NC and it created all kinds of prior payments and returns that needed to be filed and paid back to January 2018 that I had already done. It also created weird sales tax payable accounts - for example Unassigned Tax Agency for Apps Payable - Unassigned Tax Agency for Apps. Not only that, on the filings - all the amounts were incorrect. I tried to complete one and made the necessary adjustment and it added a duplicate sales tax payment that now I CANNOT DELETE!!! I talked with support and they said the only way to clear out these prior unfiled items was to "turn off efile". I cannot even do that!
Also - it asks if you want to TEMPORARILY switch to the old sales tax, but when you click on it you get a warning - You won't be able to switch back to Automated Sales Tax once you move to the old sales tax center.
Let me help and share with you some information about the Automated Sales Tax in QuickBooks Online.
The Automated Sales Tax calculates based on the Location of the sales occurred. It automatically calculates tax for the shipping fee of the customer.
To delete the sales tax payment, you can delete the adjustment you made.
- Select the Gear icon at the top, then choose Chart of Accounts.
- Find the income or expense account you used to add an adjustment.
- Select Run report.
- Select the adjustment you need to delete.
- Select Delete.
- Select Delete again to confirm.
I'd also suggest reaching out to our QuickBooks Online Support to help you confirm what agency (State) is showing that needs to be paid and to verify the payment amount in the bank.
The following articles are good references:
Should you have other questions about Automated Sales Tax in QuickBooks Online, don't hesitate to drop a reply below.
I was able to delete the duplicate sales tax payment. Yippee!!!
So is it true that if I switch to the old sales tax, I will not be able to switch back to the automated?
Also, do you know if I can turn off efile for state but not federal - and we do NOT have the AB Payroll package.
I was told that by my Proadvisor support but this client did shut it off (against my advice) and now wants it on and the box appeared after I complained I wanted it back. Not sure if support did it or if it did it on its own.
It doesn't for me. My city is in two counties. They have different sales tax. One address I know is the in "other" county and has a reduced sales tax. I added a shipping address of the service location where I photograph and have to use that city/county's sales tax chart. It did not charge appropriately and the Realtors' will not usually know the 4-digit code for the house they list. Only the standard one (which is the same throughout the city).