Posted tagged ‘sales tax’

QBO Sales Tax Update 11.8.12

November 8, 2012

[Note: As of June 13 2014, the QuickBooks blog has moved to Follow us there!]

Sales Tax Update – Default Sales Tax Rate is Coming Back

We recently launched our new sales tax experience in QuickBooks Online, and we quickly heard detailed and pointed feedback. We’re rapidly making changes to address the top issues: a company default tax rate and marking whether a customer is taxable or not.   Our current plan is to roll out these changes Friday night, Nov 9th.  You should see them starting Saturday, Nov 10th.

Company default tax rate
We’re adding back the ability to have a company default tax rate. If you previously had a default rate we’ll try to use that for your default rate. You should double check this setting. It’ll appear on invoices and sales receipts for all new customers that are taxable. Need a different rate for a particular customer?  Select a different rate in the transaction, and the rate will stay “sticky” (QuickBooks Online remembers it) for that customer.

You can check or set your default rate by going to Company> Sales Tax Center> Edit Tax Settings > Set Default Rate. In this window, you’ll see that we also added back the ability to automatically make all new customers taxable in this screen.

Make customers taxable
We’re also adding back the ability to make customers taxable so you can keep track of customers that are taxable and those that are tax exempt. Within each customer record, we’re adding a setting for making the customer taxable or not. (Customers > Customer Center > Edit Customer > Taxes tab).

Customer Contact List report
A quick way to see a list of your taxable customers is to run the Customer Contact List report. To make this easier to get to, we’re adding a link for this report in the Sales Tax Center. We’ve preset the report to include the Taxable field status and the Taxable Rate.

What’s ahead
The transition to the new sales tax experience isn’t as smooth as we wished it to be. But we’re making changes as quickly as we can in response to your direct feedback. Our current plan is to roll out these changes Friday night, Nov 9th.  You should see them starting Saturday, Nov 10th.

These same changes aren’t in QuickBooks Mobile yet because we need to get them into QuickBooks Online first. Until we roll the changes to our mobile app, be sure the tax rate for a customer is correct when you’re creating an invoice or sales receipt on the go.

We want to continue to make sales tax better for you so we’re looking at some other improvements based on the feedback you’ve given us. We’ll roll these improvements out over time.

Feedback—it’s a good thing
The entire sales tax team values your candid and detailed comments. Letting us know what works well and what doesn’t and why helps us make changes. You can give feedback by clicking the Feedback button in QuickBooks Online, and you can also post responses in this blog.

New and improved Sales Tax with multiple tax items and better reporting

October 18, 2012

[Quick note: As of June 13, the QuickBooks blog has moved to Follow us there!]

Click here for new and updated information.

Multiple Sales Tax Items

Sales tax got a makeover! We’re happy to announce we’re releasing a robust yet easier to use new way of working with sales tax in QuickBooks Online. Now you can:

  • Track and report multiple sales tax items (yay!)
  • Set up one rate that has multiple components
  • Manage all of your tax rates  and liabilities in our new Sales Tax Center.

You’ll see the new Sales Tax Center in our latest release. Go ahead and start setting up new rates in the center. Then on November 1,  start using the new rates on sales transactions (invoices and sales receipts). We chose the first of the month as the cut over date so that migration from the old sales tax to the new sales tax is easier and neater.

Setting up rates

Here’s an example of setting up multiple rates in California for two different counties:

  • San Mateo County
  • Santa Clara County

Because they have different rates, we set them up each as single tax rates, even though both are paid to the state of California and share the same agency name (California Board of Equalization).

Here’s an example of setting up a combined (group) rate for Tucson, Arizona. Sales tax in Tucson goes out to two different agencies, each with different rates. In this case, we’ve set them up as components of a combined rate. Sales tax appears as one charge to customers on invoices or sales receipts, but the Sales Tax Center breaks down that charge into components so you pay the right amount to the right agency.

How complicated the sales tax in your state is determines how you need to set up sales tax rates for your company. Consult your accountant if you have questions.

Using the new tax rates

Once you set up your new rates, you can use them on any sales transaction. When you use a rate for a customer, that rate is “sticky” for the customer. Let’s say you use the San Mateo County rate on an invoice for John Martin. The next invoice you create for John Martin automatically defaults to the San Mateo County tax rate. (You can easily choose a different rate, if you need to.)

The Tax dropdown lets you select different rates.

Note that there is no longer ONE default rate. You’ll need to apply a rate for each customer when you create a sales transaction.  After that, the rate stays “sticky” for the customer. Let us know what you think of this—do you like having a rate associated with each customer? Or do you prefer a generic default rate? Click the Feedback button in the Sales Tax Center to give us your thoughts.

Recording tax payments in the Sales Tax Center

The new Sales Tax Center is the hub for all your sales tax activities. You can see how much you owe each agency and what you’ve previously paid.  You can find the Sales Tax Center under the Company menu.

It’s also the place for recording payments against the liability account, once you start using your new rates. Simply select the row for the agency you want to pay and click Record Tax Payment. You have the option to change the amount or make adjustments, which is useful if you have a discount for paying early or a penalty for paying late.

Note:  You’ll need to pay old sales tax (tax charged before November 1) using your prior method.

Much improved reporting

We think you’ll love our new Sales Tax Liability Report. It breaks down the taxable amount and the tax collected by agency and rate.

Tips and tricks

Here are a few pointers to help make the switch to using the new sales tax easier.

  • If you were previously using sales tax in your company, rename the Tax Rate Agency as your primary agency. That is, rename Original Sales Tax Agency to something more descriptive, like CA Board of Equalization. Then use that agency name going forward.
  • To make a customer taxable, simply select a tax rate for that customer on an invoice or sales receipt. Going forward that same tax rate will automatically be used.
  • Note that if you had a default tax rate of 8%, QuickBooks Online creates a new rate for you in the drop down using that percentage .
  • If you have recurring transactions, you’ll need to edit each of them and select a new rate. After you do that, all transactions going forward use the new sales tax.
  • In the Sales Tax Center, you can choose to show amounts owed in various ways: cash vs. accrual method, monthly vs. quarterly, various start dates, and so on. For example, New York State reporting doesn’t follow calendar quarters; you can adjust the Sales Tax Owed table to start with the month of February.

What happens to existing transactions using old sales tax?

Nothing happens to your existing transactions. You probably have prior transactions saved using the old sales tax. When you open them, they show as they did before, with the older sales tax box. If you edit these transactions, you have the option of using the new sales tax rates in them or leaving the old sales tax as is.

Try out the new QBO Sales Tax – join our beta

June 25, 2012

We are now done recruiting for a limited beta of the new QBO Sales Tax. The new QBO Sales Tax enables multiple tax rates and improved reporting of sales tax.

The survey is now closed. We have recruited all the beta participants that we need. Thanks to everyone who filled out the survey.

Sales Tax Improvements Delayed (June 2012 Update)

October 31, 2011

Update 6.22.12  We are currently recruiting a limited set of customers for a Sales Tax Beta.  If you are interested, please fill out the survey at


Pardon our delay… Previously we announced that sales tax improvements were coming soon. We’re just not ready to release the improvements as we planned on November 1st. It’s important that we deliver these enhancements with high quality and smooth interoperability. We’ll postpone until we’re sure we can deliver this experience. We’re sorry, we know that some of you were excited about the improvements. We were too! We appreciate your patience.


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