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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:

  1. On the Navigation bar, click Taxes.
  2. Click the Set up sales tax button.
  3. 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.)
  4. 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.
  5. In the When did your current tax period start? drop-down list, choose June.
  6. In the How often do you have to file a tax return for this agency? drop-down list, choose Quarterly.
  7. In the When did you start collecting sales tax for this agency? field, key 07/01/2018 and then click Next.
  8. At the Sales tax is set up! window, click Got it.
  9. 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.

Chapter 6 Case Problem Journal Report

Chapter 6 Case Problem Balance Sheet Report

Chapter 7 Case Problem Bank Reconciliation Report