How to Change Sales Tax Rate in QuickBooks Online and Desktop




The Financial authorities frequently change the sales tax rate and it important for you to update the QuickBooks Sales tax that you previously created. Therefore, here in this article, we will tell you about how to change sales tax rate in QuickBooks Desktop and Online. You’ll also learn to change the custom sales tax rate if you’ve created one.

Change Sales Tax Rate in QuickBooks Online

If you are using QuickBooks Automated Sales Tax then you won’t need to edit the sales tax rates as Auto Sales Tax feature will automatically set up, update, and track all the taxes for you.

But if you manually set up or edit tax rates then you need to follow the below steps to make changes to sales tax rates in QuickBooks Online.

  • Open the ‘Taxes’ menu from the left side navigational tab and then go to the ‘Sales Tax’.
  • Now from the right side of the screen select the ‘Related Tax’ option.
  • After that, click on the ‘Add/Edit Tax Rates and Agencies’.
  • Next, a ‘Sales Tax Rates and Agencies’ window will open. Here you need to select the appropriate rate you want to change and then select Edit.
how to change sales tax rate in QuickBooks
Edit Sales Tax Rate in QuickBooks Online
  • In the ‘Edit Sales Tax Component’ Window, you can edit the tax rate as well as the name of the component.
  • After making the required changes and reviewing, click on the ‘Save’ 
  • You can view the changes you make in the Sales Tax Rates and Agencies option.

Change Sales Tax Rate in QuickBooks Online App

If you make transactions using QBO App then you also need to learn how to change sales tax rate in QuickBooks Online App.

Change Sales Tax Rate in iPhone/iPad App

  • Go to Menu and then Settings.
  • Open the Tax Rate and find the sales tax item you want to edit.
  • Click on the Edit option and then make the required changes.
  • Save the changes you made.

NOTE: You can edit the tax rates and component names only. But, you can’t change the name of the tax agencies associated with it.

Change Sales Tax Rate in QuickBooks Online Android App

From this method, you’ll be able to edit the sales tax rate of the various transactions including estimates, invoices, and sales receipts

  • Open QuickBooks Online app and then open the transaction you want to edit.
  • After that, click on the Edit icon and select a tax entry you want to edit.
  • Here you can edit the tax rate as well as the tax amount of transaction.

NOTE: To enable this feature in QBO App, you first need to give access to the app using the QB online web.

Change QuickBooks Desktop Sales Tax Rate

In QuickBooks Desktop you can edit the sales tax rate for all the customers at once if the financial institution has introduced a new tax rate. Although, you can change the tax rate every time you make a transaction for your customer.

But there is a chance sometimes you may not remember to change the tax rate in transactions. Therefore, it is necessary to learn how to change sales tax rate in QuickBooks Desktop once and for all.

how to change sales tax rate in quickbooks
Edit Sales Tax Rate in QuickBooks Desktop
  • From the top menu bar, click on the ‘Lists’ option.
  • Then select ‘Sales Item’ in the drop-down menu and right-click on the option.
  • Now, a new window will open. Here in the Tax Rate (%) field enter the new rate.
  • You can also edit Sales Tax Name and add a description. Then hit the OK button.

If you still can’t get how to change sales tax rate in QuickBooks. Then, you can also deactivate the existing tax and set up a new sales tax rate in QuickBooks for all the new transactions in QuickBooks.

Effects of Editing Sales Tax Rate in QuickBooks

  • The new transactions will use the new rate after you changed the sales tax rate. Even if you use the date before you make the changes.
  • The previous transactions won’t get affected by the changes you made in the tax rate.
  • Although you can edit the earlier transactions if you want to make changes to the sales tax rate.
  • And same is for the recurring invoice template, the new transactions will use new tax rates and earlier transactions won’t be get affected.
  • For the outstanding transactions that you’ve entered date before changing the tax rate, then you can simply edit these transactions.

Frequently Asked Questions

How to make a Sales Tax Code Inactive or Reactive?

To inactive or reactive a sales tax go to Taxes<Sales Tax<Manage Sales Tax. Then, the Tax Agencies tab will open in here select the sales tax rate you want to inactive and tick the box ‘Item is Inactive’ right next to the tax rate.

How to remove inactive sales tax items from the sales tax group?

When you inactive a sales tax item it is not removed from the Sales tax group but it is important to do if you want to use the active sales tax item in transactions. For this, go to Lists<Item List<Sales Tax Group and then select the item you wish to remove and press Ctrl+Delete and then ‘OK’.

Conclusion

We hope that you guys find this article on how to change sales tax rate in QuickBooks Online and Desktop useful. QuickBooks offers many features that ease the accounting and bookkeeping. But to understand all these QB features you may need a professional who can help you to grow your business and therefore, Our team of QuickBooks ProAdvisors can help you to achieve your goals. To know more about the services we provide call us at our toll-free customer service number +1-855-441-4417.

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