Why does our invoice automatically charge the wrong tax if no specific tax is selected? It seems to default to an inactive tax category.

Hi there, 

I know how crucial it is to assign the proper tax code on your invoices. QuickBooks Online requires a tax code to be added, whether or not taxes are collected. If the invoice is exempt from tax, you'll select zero-rated, out-of-scope, or exempt tax codes. I'd be happy to help shed some light on why your invoice is automatically assigning an incorrect tax code. 

It's possible that you've set up a default tax code for your customer or products/services. You can check that by following the steps below. 

To see if your customer has a default tax code, follow these steps:

1. Click the Sales tab on the left menu. 

2. Select the Customers icon. 

3. Click on the customer you're creating the invoice for.

4. From the Customer Details section, click Edit. 

5. Click the Tax info tab. 

6. Locate the Default tax code. 

To see if your product/service has a default tax code, follow these steps: 

1. Click the Sales tab on the left menu. 

2. Select the Products and Services icon. 

3. Click Edit next to each product/service item you're invoicing for.

4. Scroll down until you see the Tax drop-down menu. 

If either of these items have a default tax code associated to them, that tax code will be applied to the invoice. The system shouldn't be applying inactive tax codes to your invoices, so I recommend reaching out to our tech support team for further assistance with this. Here's how to get in touch: Contact Us.

I hope this helps get you back on track. 

Have a great day.