If you own a business, you have to collect taxes for some goods and services that you provide. With QuickBooks, you can easily set up correct and effective record of all kind of taxes that allows you to keep a record of them and submit them to your tax collecting agency.

This article is a part of series on Sales Tax. In this series, we have covered all the usual workflows in QuickBooks Desktop.

It also helps you complete other sales tax-related tasks.

If you face any issue regarding sales tax in QuickBooks Desktop, you can refer to Resolve common sales tax issues.

Note: Before setting up your sales tax item/groups, you need to make sure that the tax rates and requirements are matching with your tax agency.

You can begin recoding sales tax QuickBooks Desktop, you have to enable this feature and manually set up sales tax items or tax groups.

  • From the Edit menu, go to Preferences.
  • Choose Sales Tax from the preferences window and then go to the Company Preferences
  • Enable sales tax by clicking on Yes.
  • Set up sales tax items or sales tax groups all kind of country, district, city, etc. select Add sales tax item for this.
Sales tax item

A sales tax item helps you in adding or calculating tax charges while creating a taxable sale.

To create new sales tax items:

  • Select Sales Tax Item from the Type drop-down options.
  • Provide a name to the tax item in Sales Tax name field. It is recommended using a tax location for the name. Other information about this can be provided to the Description field.
  • Provide a particular rate for the item in Tax Rate (%) field.
  • Provide a name of collecting agency to the Tax Agency field. Select Add New if there is no agency added yet and click on OK.

To edit an existing sales tax item:

  • From the List menu, choose Item List.
  • Locate sales tax item that you want to update.
  • From the drop-down of the item, select Edit Item option.
  • Make required modifications in sales tax name, rate, and tax agency.
  • Click on OK.

Sales tax group

Sales tax group is used for multiple sales tax items that are shown on a single sales transaction. While setting up a sales tax group, the sales taxes can be tracked and reported separately but your invoices and sales receipts shows them as a single line item.

  • Select Sales Tax Group from the Type drop-down options.
  • Provide a name to your tax item group in Group Name/Number field and rest of the information can be added in Description field.
  • Provide each sales tax that you want to add in the group. If no tax item is set up yet, select Add New option.
  • Click on OK.
  • You need to set up sales tax codes. Basically, are sales tax code allow you to keep a record of taxable and nan-taxable sales or customers. Make sure you set up correct sales tax code to be able to run a report that separates the total taxable and non-taxable sales. When you enable sales tax in QuickBooks, it will automatically create two tax codes: TAX (taxable) and NON (non-taxable). You can use TAX code for those items, you will be collecting taxes for. NON can be used for items for which you don’t have to collect taxes.
Set up the non-taxable status of an item

  • From the main menu, go to List > Item List.
  • Choose Item and then New (or Edit Item) from the Item List window.
  • Select Non Taxable Sales (or Non Taxable Labor) from the tax code drop-down options.

Set up the non-taxable status of a customer

  • From the Customers menu, open Customer Center.
  • Locate your customer which you will set up as non-exempt and right-click on it.
  • Select Edit Customer:job option. Note: If you haven’t set up a customer yet, choose new Customer & Job > New Customer.
  • Open the Edit customer window, navigate to the Sales Tax Settings tab.
  • Choose Non-Taxable Sales (or Service) from the Tax Code drop-down options.
  • Click on OK.
  • Assign the Sales tax basis. You need to consider your company’s accounting as a preference.
  • Assign preference to pay sales tax (Monthly, Quarterly, Annually).
  • Click on OK.

Still In Confusion?

The provided steps in this article should be helpful for you in setting up sales in QuickBooks Desktop. Setting up sales tax is a crucial part of your business to manage the flow of your company. However, you may find these processes a bit complex or lengthy. You can also face several issues while setting up sales tax if you don’t follow appropriate guidelines for it. If you are not sure about setting up sales tax in QuickBooks manually, we can help you with this by dialing our toll-free QuickBooks Support Phone Number +1850-308-2863 and get instant solution for QuickBooks.

Set Up Sales Tax In QuickBooks Desktop

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