QuickBooks Tip #16: Change Sales Tax Rate

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4 responses to “QuickBooks Tip #16: Change Sales Tax Rate”

1. 

   January 13, 2014

   Susan

   I have changed the sales tax rate from 5% t0 5.3% but $0.00 is showing up when I go to look at the sales tax liability?? Any help would be so appreciated! Thanks in advance. Susan

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   1. 

      January 13, 2014

      Debbie Gilster

      Susan-
      Check your invoices to make sure that you are 1) using an item that is taxable; 2) that the TAX column on the right of the invoice is using “tax” (it’s a drop down menu); 3) your customer tax code is set to “Tax”. and/or 4) you truly are using the sales-tax item on the invoice. Any one or combination of these things can stop sales tax from calculating properly. Study an invoice you think should have sales tax.

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2. 

   January 3, 2012

   susan

   Greg,
   As a bookkeeper I want to have the past information available and would never change or delete old records of that sales tax. I don’t fool with mother nature or the government. If I was audited and the tax rates had no trail, I could be held liable. I believe it make more sense to use the method described.

   I made a new sales tax item for 2012, changed my preferences, then made the other tax rates inactive and my new invoices and sales receipts reflect the new rate. It took less than 1 minute to make those changes. I feel better have the trail of previous sales tax rates in the system, rather than deleting or changing them.

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3. 

   July 6, 2011

   Greg McKenney

   This advice is incorrect and I can prove it. You do not need to add a new sales tax item. You can just adjust the existing item. Here’s the proof: I ran an experiment, which you can easily replicate. First I backed up Quickbooks. I ran the Sales Tax Liability Report and the Balance Sheet as of today and wrote down the amount of the sales tax liability. In my case they were the same amount because we report sales tax on accrual basis in California, and my balance sheet was accrual basis as well.

   I then CHANGED the %rate on my existing sales tax item from 9.5% to 8.5%. I ran the same reports AGAIN and noted that neither report changed one bit! All my old transactions were still at 9.5%.

   Then, I entered a new sale using a Sales Receipt (I also tried an invoice). It correctly picked up the new sales tax receipt of 8.5%. When I hit my previous button to look at the prior sales tax receipt, I could see that the older receipt still correclty shows 9.5%. Bottom line: Changing the rate on the existing item does NOTHING to old transactions or reports. And adjusting the item is easier than setting up a new item because you do not need to change all the default sales tax items for each customer.

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