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How to Turn On Sales Tax Tracking in QuickBooks

Do you need to charge your customers sales tax on the invoice or sales receipt in QuickBooks? Luckily, you can set it up so that QuickBooks will handle it for you. This video explains how to do so. First, make sure you’re in Single User mode so that you can change company Preferences. Then go to Edit > Preferences > Sales Tax > Company Preferences. The screen here will ask, “Do you charge sales tax?” to which you will select yes. Once you choose that, you’re going to want to go through all of the sections on the screen and set up the Sales Tax for your business. First select “Add sales tax item”, and the screen below will pop up.

This is an example of how you might want to fill out this New Sales Tax Item form, but ensure that you specify every section to your business and the sales tax where you reside. You may also need to create a sales tax group for several localities that need to be paid per invoice.

The next section in Company Preferences is titled Assign Sales Tax Codes. Here, you can change taxable item code and non-taxable item code. AQB suggests simply working with taxable and non-taxable item codes, and 99% of our clients work that way. There isn’t much need to add a bunch of different item codes – you may also need one called exempt though. Select the box below to identify taxable items on your receipts.

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You may also specify when you owe sales tax or when you pay sales tax – cash or accrual basis depending on your state. Cash basis you owe sales tax when you receive payment from your customer. Accrual basis, you owe sales tax when you invoice your customer. You can get most of this information from your local tax authority. Make sure all of your information is entered correctly, and you’ve set up sales tax in QuickBooks!

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About Marjorie Adams

Our head QuickBooks trainer and guru, Marjorie Adams, is Founder and CEO of Fourlane, Inc., an award-winning consulting firm and Intuit’s #1 QuickBooks Reseller Partner. Fourlane’s team of experts offers several QuickBooks oriented services including consulting, training, programming, integration, and more. Over the years, Fourlane has helped over 10,000 customers across many different industries with their QuickBooks accounting software. Marjorie Adams is considered one of the top QuickBooks trainers in the country. She was listed on CPA Practice Advisor’s 40 Under 40 in 2014 & 2015, and has been recognized as Intuitive Accountant’s 2015 QuickBooks Desktop ProAdvisor of the Year. Marjorie sits on Intuit’s VIP Program, is a frequent contributor to Inuit Accountants News Central, and has developed Intuit’s QuickBooks Enterprise Certification training. She has also been published in The Wall Street Journal, Forbes, BusinessWeek, American Express Open, the Huffington Post, and Inc. Magazine.

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