Sales tax is not calculating correctly

andyhoyt · ‎February 05, 2022

Our company sells products and services in numerous states and we collect/pay sales tax to several different state tax agencies. We have been using QB Online for 5 years without any problems collecting the correct tax for every state/municipality. As of January 1, 2022, something has changed in the QB invoicing and it now records every sale as if it happened at our corporate office. I have contacted QB support 11 times to get this resolved and have been told that it can't be changed and nothing has changed with their system. This is clearly not correct as we have been accurately collecting sales tax for 5 years and NOW it doesn't work. Out of the 11 times I have spoken to support, 10 times I was told it couldn't be changed and ultimately disconnected/hung up on. One time I was escalated to second level support, she told me I needed to be escalated again and then disconnected/hung up on me. I know the tax can be manually changed, however, we generate lots of invoices and cannot efficiently change every single invoice. If anyone knows a fix for this, please let me know. Thank you.

JonpriL · ‎February 05, 2022

Let me make it up to you, @andyhoyt. I want to ensure your sales tax is calculated correctly.

You have the option to create a custom sales tax rate in QuickBooks Online (QBO). This way, creating an invoice gives you the option to choose sales tax to calculate and collect in every state or municipality. I'll show you how.

Go to Taxes.
Select Sales tax settings.
Under Custom rates, select Add rate.
On the Add a custom sales tax rate section, select the appropriate category.
Select the correct sales tax agency.
Enter the name and the rate of your new sales tax.
Click Save.

Use this link to read and learn more about your new custom sales tax: Create Custom Tax Agency.

I'm adding this reference for topics to use and get around with the tasks related to sales taxes in QuickBooks: Sales Tax in QuickBooks Online.

I've got you covered if you have other questions about sales tax agencies and rates. Let me know by leaving a comment using the Reply option below. Take care always!

andyhoyt · ‎February 07, 2022

I understand this "work around" and it is not acceptable. Your solution requires changing the sales tax individually on every single invoice, this is unacceptable. QB used to calculate sales tax accurately and automatically for every invoice if you selected "By Location". It is completely unacceptable for us to have to enter tax manually for every invoice.