Sales tax observance requires you to track the taxable and non-taxable sales separately. The tax is then calculated on the basis of each transaction and based on that are generated by the report summaries for the sales tax returns.
QuickBooks allows you to manage the sales tax reporting. The point that you should bear in mind is that QuickBooks allows you to edit the component rates only. If you wish to edit the combined rate, then you have to go through the component rates to see a change in combined rate.
Steps to change sales tax rate in QuickBooks
This section of the article will guide you through the steps that you need to follow to change the tax rate in QuickBooks. Please make sure that you follow the steps in the right order as mentioned:
- Launch QuickBooks on your PC.
- From the menu please select ‘Taxes.’
- Now from the drop down menu click on ‘Sales Tax’ option.
- Now look for ‘Related Tasks’ option and click on it.
- From the drop-down menu that follows please choose ‘Add/ edit tax rates and agencies’ option.
- You will now see a ‘Sales tax rates and agencies’ table.
- Here you can make adjustments to the rate. Just click on your desired rate and click on ‘Edit’ option.
- Now a new window will open on your screen names- ‘Edit Sales Tax Component.’
- Here you can change the rate.
- If required, you can also change the name of the component.
- Once you are satisfied with the changes, please click on the ‘Save’ button.
- You will see that QuickBooks will take you back to the ‘Sales tax rates and agencies’ table and highlight the changes that you have just made for you to view the newly made changes.
Application of the newly changed sales rate:
- When you change the sales rate, it gets applied only to the new transactions.
- If the old transactions are changed to some current date, the new rates will then be applied to them.
- QuickBooks only follows one rate. Therefore after the change in the sales rate, only the new one will be followed.
- The new and the old transactions retain their specific sales rates in the case of recurring templates.
- Reports also reflect new and the old transactions retaining their specific sales rates if the earlier sales rate stays untouched.
- The existing transactions that were created with earlier rate stay unchanged until modified.
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