By default, QuickBooks Online sets up tax agencies in jurisdictions where you collect tax. Tell QuickBooks Online to use AvaTax, and not these tax agencies, to calculate sales tax.
Important: If you do not follow these steps, tax may be calculated twice: once with QuickBooks Online and once with AvaTax.
- In QuickBooks Online, go to Taxes > Tell Us Where You Collect Tax.
- For each Sales Tax Agency, select Edit.
- Change the Start Date for the agency to a date far in the future (for example, 01/01/2199).
This ensures QuickBooks Online uses only AvaTax to calculate sales tax.
- Go to Taxes > Update Products and Services.
- For each product and service, select Edit and select Taxable - Standard Rate for Sales Tax Category.
This ensures that products and services are still taxable after the changes to the sales tax agencies.
QuickBooks Online is now using only AvaTax to calculate sales tax on invoices.
What if I see...
"You're not set up to collect sales tax for this sale. If you need to collect tax, go to your settings and add/update the appropriate tax agency."
This message displays when you are creating or editing an invoice and refers only to QuickBooks Online sales tax calculation. As long as you installed the AvaTax app in QuickBooks Online and told AvaTax where your company collects and pays sales tax, you can ignore this message.
After you select Estimate Tax, a line should appear on the invoice indicating AvaTax calculated tax. (The dates in this image are an example of what might appear.)
If this line doesn't appear to your invoice after estimating tax, make sure you've installed the AvaTax app in QuickBooks Online and have told AvaTax where your company collects and pays sales tax.