Thanks for joining us here, Frank Alazona.


I can help bring clarifications to your concern on how QuickBooks Online (QBO) calculates your sales tax.


Below are the list of basis on how QuickBooks automatically calculates the total tax rate for each sale:


  • Your customer’s tax exempt status
  • Where you sell and where you ship
  • Your service or product’s tax category

Additionally, the calculation of your sales will depend on how you set it up. On your invoice, you can Select tax rate to either be based on location or use custom rates.


The Based on location option means taxes applied will be based on the address set up on your customer information. Custom rates on the other hand, are those sales tax created with your preferred rate.


To give you additional information on how sales tax works in QBO, check out the following articles:


Be sure to get back to me if you have additional questions. It would be my pleasure to help. Have a good one!