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Calculate Sales Tax

As long as you enable tax calculation and select AvaTax Update as the tax calculation method in your accounting software, AvaTax Update automatically calculates a sales or use tax rate on a variety of transaction types according to the taxability rules of those products (exempt customers aren't charged sales tax):

  • Estimates/quotes
  • Orders/invoices/cash sales
  • Return authorizations/credit memos/cash refunds

Create one of these transaction types in your accounting software. AvaTax Update uses the customer's ship-to address to calculate the correct sales tax.

If you're applying discounts, remember:

  • A header-level discount is applied to all taxable items in the transaction
  • A line-level discount is applied to the item above the discount row
  • If both a header-level and a line-level discount are applied, their cumulative discount is applied to the line item

Calculate sales tax

For sending currency code and BIN in the transaction details, ensure that:

  • For multiple currencies:
    • Multiple Currency and Enable Multiple Currencies in QuickBooks Desktop > Edit > Preferences are enabled. Once enabled, this setting cannot be changed.  
  • For Business Identification Number (BIN):
    1. Create a custom field in the Customer Card. To create a custom field in the Customer Card, go to Customer Card > Additional Info and click Define fields
    2. In the Custom field, type the BIN.
    3. Go to File > AvaTax > Preferences > Taxability > International Tax ID section and select the business identification number you want to use.

To calculate tax, follow these steps:

  1. On the QuickBooks Desktop page, click one of the following to load the template:
    • Refunds & Credits (for credit memo)
    • Quotes 
    • Sales Order 
    • Create Invoice
    • Create Sales Receipt

  2. Next to the Customer Job field, select a customer.

    QB-CustomerJob.png
  3. If you want to send the purchase order number, type the P.O. Number for the Sales Order and Invoice.
  4. In the Bill To or Ship To, select or add the address. If you are typing an international address, use the full country name instead of the ISO country code.
  5. In the Credit Line, under the Item column, type the Item Name and under the QTY field, type the Quantity.QB-ItemsandQuantities.png
    Note:
    Don't add the line amounts or quantities as negative numbers. QuickBooks Desktop recognizes the dollar amounts as negative numbers when you use the credit memo template.
  6. To add discount, select Discount from the Item column. Ensure that Discount is added in the Item list. Go to Lists > Item List.  On the Item List page, click Item > New and add Discount. Add the details and click OK
  7. Next to Tax, select AVATAX.
    QB-TaxID.png
  8. Click Save & Close.
    QB-SaveandClose.png

Calculate sales tax using a bill-to address

To calculate sales tax using a bill-to address, follow these steps:

  1. On the QuickBooks Desktop page, click Sales Order or Invoice to load the template.
  2. Next to the Customer Job field, select a customer.
  3. In the Credit Line, under the Item column, type the Item Name and under the QTY field, type the Quantity.QB-ItemsandQuantities.png
  4. Next to Tax, select AVATAX-BILLTO.
    QB_BillTo1.png
    Note:
    If you select Tax as AVATAX-BILLTO and the bill-to address is not available, then the tax is calculated using the ship-to address.
  5. Click Save & Close.
    QB-SaveandClose.png

Calculate sales tax for unresolved transactions

To calculate sales tax for unresolved transactions, follow these steps:

  1. Go to File > AvaTax > Utilities and click Synchronize and View Unresolved Sales Tax Errors.
  2. On the View Resolved Sales Tax Error page, select either All Documents or one of the following specific filters:
    • Date Range
    • Document Type
    • State

    QB_ViewUnresol.png

  3. Click Show Error List.
  4. Click Edit Transaction to update the transaction details.
  5. You can either select a transaction and click Recalculate or click Calculate All to calculate sales tax on all the transactions.

Calculate sales tax using tax override

The tax override feature lets you manually alter the tax amount on a specific transaction by changing the transaction date. This feature allows you to change the tax amount to something other than the value that was previously calculated.   

Note:
The tax override feature is available only for credit notes and return orders.

To override tax calculation, follow these steps:

  1. Go to QuickBooks Desktop > Refunds and Credits and select the return order for which you want to override tax calculation.  
  2. To override sales tax using one of the following:
    • Date: Go to File > AvaTax > Tax Calculation Date. Change the date of this return order to the date on which you want to calculate tax.
    • Amount: In the Item drop-down menu, select AVATAX-SalesTaxAdjust from the list and save the credit memo. The earlier sales tax amount is changed to 0 and sales tax is calculated again.
  3. Click Save and Close to calculate sales tax using the revised date.

    QB_TaxCalDate.png


 

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