Setting Up Combined Sales Tax Rates in QuickBooks Online

You can set up combined sales tax rates in QuickBooks Online with just a few easy steps.

Why use a combined sales tax rate?

A combined sales tax rate is useful when you have to report several different jurisdictions under one main local. For example, in the state of Georgia, we have a main Georgia rate and then each county has an additional sales tax rate. Each of these different counties (or even local cities) can be setup as an individual combined rate. Then when you run the sales tax reports out of QuickBooks Online, you are able to see the split that is due to the different counties and then what is due to the state overall.

Adding new combined sales tax rates

To add a combined sales tax rate go to Sales Tax and then Add/Edit tax rates and agencies. This will be an option in a box to on the right-hand of the screen.

Add Sales Tax Rates in QuickBooks Online

Select New then move forward with entering in your combined sales tax rate.

New Sales Tax Rate QuickBooks Online

Expert tip with combined sales tax rates

You’ll need to setup a new combined sales tax rate for each jurisdiction. One important thing to note is that in order for the combined rates to work properly in reporting for QuickBooks Online, you’ll need to make sure that the Agency name is EXACTLY the same in every instance. If you have a period missing or if you spell out Department once and then shorten it to Dept. the next time, this will mess with your sales tax reporting in QuickBooks Online.

Below, you’ll see that the Arizona agency is written exactly the same.Sales Tax Listing in QuickBooks Online

Since the agency name is not tied to a vendor name in QuickBooks Online and you have to type it manually, this is why I am pointing out the issue. When everything is entered using the same agency name, then the sales tax screen will group everything like the following.

Sales Tax by Month in QuickBooks Online

As you can see, it is really easy to setup combined sales tax rates in QuickBooks Online. Have you run into any issues with setting up combined sales tax rates? Do you have any other tips to share? Share your comments below and check out our other blog posts on Sales Tax in QuickBooks Online.

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Cathy Iconis

Cathy Iconis, CPA is the creator and facilitator of the weekly tweetchat #QBOchat and the website - a community for QuickBooks Online Users. She is also the founder of Iconis Group, an Intuit Top 20 Firm of the Future, that supports small businesses all over the United States with their bookkeeping needs. She is a five-time recipient of the prestigious CPA Practice Advisor 40 Under 40 Award, given annually to just 40 people nationwide.

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