Question

Automated Sales tax needs to be turned off - period. In Texas we have to charge the sales tax rate for whatever city we are serving

Forum|Forum|7 years ago
January 20, 2019
14 replies
0 views

Original commenter did not share additional details

QuickBooks Online

lynda11_2

Hello @accounting40: You should see the option in sales tax where you can go back to the old style of sales tax.

But the new way does go by the shipping address, so it should process the sales tax properly for you.

Lynda

C

ChallengingDesigns

It doesn't for me. My city is in two counties. They have different sales tax. One address I know is the in "other" county and has a reduced sales tax. I added a shipping address of the service location where I photograph and have to use that city/county's sales tax chart. It did not charge appropriately and the Realtors' will not usually know the 4-digit code for the house they list. Only the standard one (which is the same throughout the city).

Rustler

In Texas sales tax is ONLY destination based if you go to another city/county and perform some services.

If you sell on line, then sales tax is origin based, you only collect sales tax for your city, county, state

S

Sandra Showalter

QB only uses the State Tax of 6.25% .

There is still local taxes that need to be incorporated..yes based on where you do the work. But in almost all places this is an additional 2%.

I have to manually change the 6.25% to 8.25% for every single transaction within QB.

Having the option to add an additional 'Local Tax' would be ideal.

Is there a way to do this?

A

Anonymous

Hi there, @Sandra Showalter.

Let me help show you how to add an additional sales tax in QuickBooks.

Here's how:

Go to Taxes and click Sales Tax.
Click the Add/Edit tax rates and agencies on your Sales Tax Center.
Select New tab to add a new tax rate.
Fill in the details on the New Sales Tax Rate window.
Once done, click Save.

On your transaction form, you can select the correct sales tax rate by clicking the drop-down arrow for the sales tax field.

That should do it. I'll be here to help if you have other questions about sales tax. Have a good one.

lynda11_2

Since it appears to be very complicated in Texas, perhaps use the app for sales tax called tax jar or alavara? They are both excellent for sales tax. They are an "add on" application but perform much better than the one recently embedded into QBO. If you need/use it and want it automated, that would be my suggestion. If you only need it sparingly, you can turn it back to the prior "classic" sales tax.

Rustler

No avalara is useless in Texas as is Taxjar

Texas allows the business to decide if they will pay sales tax using cash or accrual basis - both software companies are ONLY accrual based sales tax with no option to change basis. Their laughable suggestion is to manually do the computations for sales tax payable if you are cash based, make adjusting entries in the sales tax payable account, then pay sales tax - and they want to be paid too. Explain that to an auditor!

Both software companies work off the ship to address, which is fine for those businesses who travel, but for stand alone or internet sales, that would require that you add in your own address as the ship to address, more work than needed

lynda11_2

So, @Rustler, do you have a work-around? I thought Avalara worked for everyone? Sounds like the sales tax situation is not fun in Texas! I think Florida is trying to ruin what they have here and mirror your state. This year they just complicated it too.

Lynda

C

CASProfessional

I agree 100%. The new Automated Sales tax DOES NOT work for Texas. What's worse I have been told that if you are new to QBO and came on after the new Automated Sales tax you never had the option of using the Old system and, therefore, you cannot go back to the old system. You are stuck with a worthless program. Intuit, needs to give users the option of using Cash or Accrual basis and also to pick if you want to use the shipping address or the origin location to calculate sales tax. Somewhere Intuit got the misguided idea that Texas is an origin based state, and will only calculate sales tax based on the shippers location making it necessary to override the tax amount but then your sales tax reports are worthless because all taxes are still shown for the shipper's location. Taxes, however, need to be filed by City and/or county.

PreciousB

Thanks for joining the conversation, CASProfessional.

Let me share some insights about the Automated Sales Tax feature in QuickBooks Online (QBO).

You're right that new QBO users no longer have an option to manually enter sales tax. As mentioned previously, our workaround is to manually override the sales tax amount on each transaction. This will let you enter the correct percentage or amount on an invoice or sales receipt.

Let me show you how:

Click the Plus sign icon at the top, then choose Invoice or Sales Receipt.
Enter the needed information.
Select the Sales tax hyperlink.
Click the Override this amount link.
Enter the details and click Close.

For more details about sales tax, please check this link: Automated Sales Tax Hub.

I'll definitely pass along your experience. Our engineers make improvements in QuickBooks Online by listening to our customers' suggestions and comments.

Thanks a lot for raising this concern.

That should get you back on track. Please let me know how that works for you. I'll be here and ready to help anytime. I'm cheering you to continued prosperity.

S

Steven_O

Just to add my two cents about non-texas problems. This doesn't work for me either in CT. It might if I were a straight retail outlet. The thing about QuickBooks is that the feature may not be in there for you but you can always work things around, that is until QuickBooks starts telling you how to do it the "correct" way.

Zeroing out sales tax for me doesn't work either because I need to classify my sales based on the client and the type of work I am doing for them. I have specific exemptions and CT makes you classify them all when you file; the new work automated thing doesn't let me classify exemptions so I have to look at each transaction and put it into an excel spreadsheet to calculate how much of each type I have. I used to just have a sales tax category for each exemption and have it at a zero rate, then it would automatically classify the sales in each field. This could all be resolved if QBO would stop locking down reports and let users create their own query of their data.

Don't create a feature that doesn't allow a user to think for themselves...its a great feature for people who don't know what they are doing otherwise but don't dumb down QBO so much that power users can't do it better.

Rustler

@accounting40

Just so that others from Texas who read what you said do not misunderstand.

Texas is origin based, sales tax no matter where you ship to, is calculated on your location

IF, If you go outside your area for a service, that is when destination sales tax kicks in and you collect sales tax for the city, county, state you actually preform the service in

M

mhs3

Automated Sales Tax is a nightmare. I am in NC and it created all kinds of prior payments and returns that needed to be filed and paid back to January 2018 that I had already done. It also created weird sales tax payable accounts - for example Unassigned Tax Agency for Apps Payable - Unassigned Tax Agency for Apps. Not only that, on the filings - all the amounts were incorrect. I tried to complete one and made the necessary adjustment and it added a duplicate sales tax payment that now I CANNOT DELETE!!! I talked with support and they said the only way to clear out these prior unfiled items was to "turn off efile". I cannot even do that!

Also - it asks if you want to TEMPORARILY switch to the old sales tax, but when you click on it you get a warning - You won't be able to switch back to Automated Sales Tax once you move to the old sales tax center.

Rose-A

Hi, mhs1102.

Let me help and share with you some information about the Automated Sales Tax in QuickBooks Online.

The Automated Sales Tax calculates based on the Location of the sales occurred. It automatically calculates tax for the shipping fee of the customer.

To delete the sales tax payment, you can delete the adjustment you made.

Here's how:

Select the Gear icon at the top, then choose Chart of Accounts.
Find the income or expense account you used to add an adjustment.
Select Run report.
Select the adjustment you need to delete.
Select Delete.
Select Delete again to confirm.

I'd also suggest reaching out to our QuickBooks Online Support to help you confirm what agency (State) is showing that needs to be paid and to verify the payment amount in the bank.

The following articles are good references:

Should you have other questions about Automated Sales Tax in QuickBooks Online, don't hesitate to drop a reply below.

M

mhs3

THANK YOU!

I was able to delete the duplicate sales tax payment. Yippee!!!

So is it true that if I switch to the old sales tax, I will not be able to switch back to the automated?

Also, do you know if I can turn off efile for state but not federal - and we do NOT have the AB Payroll package.

Thanks!

Mary

C

Cold Springs Storage

I am a Texas business. We are located outside of the city limits, so we should not collect the city sales tax portion of 2%. We are only required to collect the state rate of 6.25%. Because our business has a city address (post office), then QBO assumes that we use the combined 8.25% rate. Every time we have a taxable sale, we have to override the sales tax. Furthermore, if we make any changes to the invoice, it makes us override the sales tax again. If we set up a recurring transaction, it requires an override. If we make any changes at all to the recurring transaction, we have to remember to override again. It's not working to assume that because our business has a city address, that we are located within the city and should collect the city rate. It just doesn't work that way in Texas. We need a setting to permanently override the sales tax rate for our location, which happens to be outside of the city limits. We try to catch most of them, but it's impossible and cumbersome.

M

Mark_R

Hi @Cold Springs Storage,

I understand that you're only required to collect the state rate of 6.25%. As mentioned in this thread, sales tax are based on the address on where you do the work which also collects the city rate of 2% automatically.

What we can consider right now is to manually override the sales tax amount on each transaction. For your reference, you can read this article for the detailed steps and information: Override Sales Tax on Transactions.

Also, I can see how important to have a setting that can permanently override the sales tax rate for your location. I want to let you know that your voice matters and I'm submitting your feedback directly to our engineers.

For now, you can visit our blog site so you'll be able to get the latest news about QuickBooks and what our Product Care Team is working on.

Please feel free to post any other questions you have below. The Community and I are always here to help you out.

T

Tx_User_128

If sales tax is being calculated based on location, it is calculating the incorrect location amount. I've attached a screen shot of what the breakdown should be that I got from the Tx Comp Page (https://mycpa.cpa.state.tx.us/atj/). It should be calculating 8.25 but is only calculating 7.25. Since this is a newer acct, it's not allowing me to switch back to the old version.

There should be a better way other than having to manually adj each transaction.

P.S. Some of the confusion on comments on whether collect tax from place of business or where delivered, is in terminology. Sales tax vs Use tax.

https://comptroller.texas.gov/taxes/publications/94-105.pdf

R

Rasa-LilaM

Thanks for adding more details about your concern, @Cold Springs Storage.

When calculating the rate, QuickBooks looks into the physical address. Aside from that, the state where you have a nexus and registered to collect sales taxes, etc.

Since your business is located outside the city limit, we’ll have to check the address to identify the appropriate sales tax rate. This requires pulling up an account to verify the information.

I recommend contacting our QBO Care Team since they can collect personal data in a secure space. They have tools to configure the setup of the Sales Tax Settings and make sure it calculates the correct rate.

To reach them:

Let's open your QBO company, then go to the Help menu to select the Contact Us link.
Enter contact support in the field box to choose the Let's Talk button.
In the contact us window, choose how you want to reach our support team: Get a callback or Start messaging.

For additional resources, the Find your sales tax rate for your state article contains links to each state agency. Click on the Sales Tax Rates: States P-W link to view the rate.

Let me know if you have any other concerns while working in QBO. I’ll be right here to assist further. Have a good one.

S

sgib199

Contractors/service companies who work both inside and outside the jurisdiction, destination based sales tax are in play even on jobs within their city/county.

It's easiest to use an an example to explain the distinction I'm trying to make. company based in Plano, Texas, does a job for a customer who is also in Plano, is collecting:

State of Texas 6.25%

City of Plano 1.00%

Dallas MTA 1.00%

Then they do a job in Dallas:

State of Texas 6.25%

City of Dallas 1.00%

Dallas MTA 1.00%

Sales tax for Dallas MTA is being collected on both jobs. Once jobs are performed in more than two cities, with jurisdictions that potential overlap the various cities, it gets messy very quickly. Simply knowing that how much sales tax was collected on Plano jobs, and how much sales tax on Dallas jobs, does not solve the problem.

The old QB sales tax system did a great job of allowing us to set up all the component jurisdictions, and then combine them into sales tax rates for various locations. Quickbooks would give a report that totaled taxable sales by each component taxing jurisdiction, which could be transferred directly over to filing a sales tax report on the Texas webfile system.

Businesses in Texas who ship goods to locations around Texas are origin based.

If QB is going to attempt to have an automated system, it needs to give the option of allowing sales tax to be based on the ship-from point, or the location of the job.

As it is, it isn't very useful.

C

clintwb

Oh my goodness - YES. We are in the same boat and in the Dallas "Area". Our office is outside of Dallas city limits but the work we do almost always has to be taxed at our customers' addresses (Dallas, Plano, Richardson etc...) which all have either a 2% city tax or a 1% city tax and a 1% Dallas MTA tax etc... Why cant this get solved.

S

salestaxguru

You just need to map your products or services to the following tax category and sales tax will be calculated at the ship-to address that you put in your invoice >> you need to tell QBO that you want to calculate tax at the ship-to for your business transaction, since more sales are sourced at the ship-from in Texas. It's set up at the ship-from by default.

The name of the category you want to use is >> Apply sales tax at ship-to address where permitted under state law

Once you do this, you will see the sales tax rate at the ship-to address calculated. Hope this helps!

P

prmartinez97

Agreed, our plumbers work in different cities/counties which require charging taxes at different rates. I do not want to pay a flat rate for the city of Santa Fe, NM as QB is making me. It's too high!!! The automated sales tax needs to be turned off - period

Show more replies

Sign up

Login with SSO

Login to the community

Login with SSO

Scanning file for viruses.

This file cannot be downloaded