Updated Sales Tax Feature in QuickBooks Online
As of early 2018, Intuit changed how sales tax is applied in QuickBooks Online. Previously, users manually set up a taxing agency and sales tax rate. QuickBooks Online now automates the sales tax feature and applies a sales tax rate based on the address of the company.
For those using Computerized Accounting with QuickBooks® Online 2017, new instructions for how to activate the sales tax feature in QuickBooks Online are detailed below and should replace those in Step 3 of the Case Problem on page 198 in the textbook.
To activate the sales tax feature, follow these steps:
- On the Navigation bar, click Taxes.
- Click the Set up sales tax button.
- At the Set up sales tax window, confirm the address, click the Looks good button, and then click Next. (QuickBooks Online will use the address to determine the sales tax rate.)
- Check No at the Do you need to collect sales tax outside of New York? You will then move to the Can you tell us about who you pay window.
- In the When did your current tax period start? drop-down list, choose June.
- In the How often do you have to file a tax return for this agency? drop-down list, choose Quarterly.
- In the When did you start collecting sales tax for this agency? field, key 07/01/2018 and then click Next.
- At the Sales tax is set up! window, click Got it.
- Return to the Dashboard.
Instructors should note that solutions to the Case Problems in Chapters 6 and 7 were affected by the automated application of an 8.625% tax rate. (Previously, the textbook instructed students to apply an 8% sales tax rate.) The following model answers reflect the application of the new tax rate and have been updated in the Instructor eResources.