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tropicalfunkstud
April 1, 2020
Question

How do I have the shipping taxable in my invoices? I only see how to make the products taxable?

  • April 1, 2020
  • 11 replies
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11 replies

RenjolynC
RenjolynC
April 1, 2020

Hello there, tropicalfunkstud.

 

In QuickBooks Online, after setting up the automated sales tax, taxes are automatically calculated based on the following:

 

  • Your customer’s tax-exempt status
  • Where you sell and where you ship
  • What you sell

 

In some states, when you sell or ship to a different address, sellers are required to charge sales tax based on business location. To view and make changes on the tax information, you can click the See this math link under Sales tax.

 

Here's a sample screenshot of what it looks like:

 

 

I've also got some articles here that includes a lot of information about sales tax in QuickBooks Online: 

Please leave a comment if you need more help with this. I'm just a few clicks away to help you some more. Stay safe!

ABradfield
August 4, 2020

As a florist in Washington State, I am exempt from charging different sales tax rates depending on where the product is being shipped to. Florists are allowed to charge sales tax based on where the product was produced -- so the shipping tax rate is the same regardless of destination. How do I change my settings so the sales tax is charged on Shipping? Currently in my system, sales tax is not being charge on the Shipping line.

ReyJohn_D
August 5, 2020

Thanks for joining the thread and sharing details about your concern, @ABradfield.

 

Let me share some insights about adding shipping sales tax when creating invoices in QuickBooks Online (QBO).

 

Yes, you're correct. The Shipping field on an invoice won't be taxed since you'll have to manually add the exact amount to it. I've got a workaround you may perform to get around this.

 

You can add the shipping fee as a service item in the Product/Service section. Then, ensure to put a checkmark on the Tax column and choose a sales tax rate to make it taxable. Here's how:

 

  1. Click the +New button, and then choose Invoice under the Customers section.

  2. Select the Customer name in the drop-down ▼ and other info needed.
  3. Create a line item in the Product/Service section (for your florist business).
  4. Make a service item. Simply click the +Add new button, and then select Service. Enter "shipping" as the name, then Save and Close.
  5. Make sure to enter an amount, check the Tax column, and then select a taxable rate.
  6. Hit Save and Close once ready.



I'll be adding this handy resource as your guide on how to modify the sales tax in QBO: Edit Sales tax.

 

You may personalize your invoices and other sales forms to make it more appealing and professional looking. Check out this article for the detailed instructions: Customize invoices and sales forms.

 

Also, you can batch email or print your invoices and sales forms to make your task easy and efficient: How to send and print multiple invoices and other sales forms.

Then, once you receive payments from your customers, you'll want to enter them in QBO to organize your records: Record invoice payments.

 

Click the Reply button if you need more help about managing your sales tax or anything else related to QuickBooks. Take care and have a nice day.

JWHCC
January 21, 2025

It appears that QBO's sales tax calculations are not built correctly. QBO doesn't apply sales tax to the Shipping field, which will cause incorrect sales tax calculations in its Automated Sales Tax calculations. Please fix this ASAP.

CharmieH
January 22, 2025

Thank you for joining this thread and bringing this to our attention, @JWHCC. I'm here to clarify this matter and provide a workaround to ensure that your taxes are calculated properly.

 

The Shipping field under the Sales Tax section is used manually to track shipping expenses. At the moment, only the products and services items can be taxable.

 

If you want to make the shipping fee taxable, we can create a taxable Service for the shipping and add it to the products and services line items.

 

Here's how:

 

  1. Go to Sales, then select the Products & services.
  2. Click New, then select the Service.

     
  3. Enter "Shipping" as the name, then edit the Sales tax.
  4. Click Save and close.

     
  5. Open an invoice, then go to Product or service.
  6. Add the Shipping to the line items.
  7. Enter an amount, and check the Tax column.
  8. Once done, hit Save and close.

 

With these steps, we don't need to enter the shipping manually into the Shipping field.

 

On the other hand, you can manually calculate the shipping tax, add it to its exact amount, and enter it into the shipping field, if you don't like creating a product and services for it. Please remember to provide a Note to customer that the shipping tax is already included.

 

You can explore the resources below. This can help you make your invoices, estimates, and sales receipts personalized. Also to know how much sales tax you owe.

 

 

I would love to introduce you to the QuickBooks Live Expert Assisted team. They're a group of experienced experts ready to help you smooth out your financial operations.

 

If you need more assistance or further clarification you can drop it to this thread. The Community team and I are here to address all your concerns. Have a great day!

JWHCC
January 23, 2025

An undocumented workaround isn't an appropriate solution to something as critical as sales tax compliance. I'd highly recommend making this more obvious on your Sales Tax feature guides, as this brings a lot of risk for entities who rely on your "automated" sales tax calculation. You can't claim it's automated if it misses components.

 

Please fix your software.

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