How to Turn On the Sales Tax Feature in QuickBooks

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In Brief...

If you need to collect sales tax but you didn't set up the feature when you set up QuickBooks, follow these steps to turn the feature on.

This feature works the same in versions 2011–2016 of QuickBooks.

Instructions

  1. From the menu, select Edit > Preferences. The Preferences dialog box opens.
    Preferences

  2. In the left pane, click Sales Tax and then select the Company Preferences tab.
    Company Preferences Tab

  3. In the Do you charge sales tax? field, select the "Yes" option.

  4. Click Add sales tax item. The New Item dialog box opens.
    New Item Dialog Box

  5. In the Type drop-down list, ensure that "Sales Tax Item" is selected.

  6. In the Sales Tax Name field, type a name for the sales tax item.

  7. In the Description field, type a description for the sales tax item.

  8. In the Tax Rate (%) field, type the tax rate.

  9. From the Tax Agency drop-down list, select the vendor record of the tax agency you are collecting taxes for. (If the vendor record does not exist, select "<Add New>" and set up a vendor record.) Click OK.
    New Item Dialog Box

  10. Repeat steps 4–10 for each sales tax item you need to add.

  11. From the Your most common sales tax item drop-down list, select the appropriate item. Click OK.
    Preferences Dialog Box

  12. The Updating Sales Tax dialog box opens. Mark or clear the options as appropriate, then click OK.
    Updating Sales Tax Dialog Box

  13. QuickBooks notifies you that it needs to close its open windows to update your preferences. Click OK.

Author: Lee Fifield

Lee is a writer, editor, and technology evangelist. Lee received her undergraduate degree in Communications from Ithaca College.

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