Prerequisites

This article shows you how to setup tax rates if your account is connected to QuickBooks Online. The following two conditions must be met before moving forward:

  1. Your Field Service Management software is connected to QuickBooks Online

  2. Your QuickBooks Online account uses Automated Sales Tax

Once these two steps have been completed you can begin managing your tax rates in QuickBooks Online using the steps below.

Login to QuickBooks

Log into QuickBooks Online and click on "Taxes" in the left side navigation menu. You should see a screen similar to the one below. If you do not, then please review the prerequisites section before moving forward.

Once you are in the Tax section of QuickBooks Online, click on the Sales Tax Settings button in the top right of the screen.

Create Tax Agencies

From here, you can add your tax agencies for the various states, counties, municipalities and territories where you need to collect tax. Click "Add Agency" to create a tax agency.

When creating an agency, you will need to specify the territory, filing frequency, start date, and reporting method.

Create Tax Rates

Once your tax agencies have been configured, you will need to create tax rates for each territory where you collect tax. Click "Add Rate" to create a tax rate.

When creating a tax rate you need to specify whether the tax rate is single or combined, then provide the name, associated agency, and tax rate.

Sync With QuickBooks

Once your tax agencies and tax rates have been setup in QuickBooks Online, you will need to login to the Field Service Management product and sync with QuickBooks Online. To do that, go to Settings > Accounting, then expanding the click QuickBooks section, and then click on Synchronize to sync the tax agencies and tax rates you created.

Once the sync is complete, navigate to the taxes section to confirm that the taxes you setup in QuickBooks Online have successfully synced. You can do this by going to Settings > Accounting, then expanding the Taxes section and viewing the tax names and rates that have been populated.

Setup Tax Zones

Once your tax rates have been configured, you will need to setup tax zones. Tax zones associate a zip code with a tax rate. You can do this by going to Settings > Accounting, then expanding the Taxes Zones section.

To create a Tax Zone click on "Add New" then provide a Tax Zone name for the region, and assign the appropriate tax rate. You then need to indicate whether the tax zone collects tax for products and services. Once this is done, you need to assign zip codes to the tax zone.

You can then filter all the available zip codes for a territory in the filter section, then individually add a zip code by clicking on the "+" sign, or add all of the zip codes by clicking "Add All". Once you have specified all the zip codes for the specific zone you can click save.

Other Considerations

Now that your tax agencies, tax rates, and tax zones have been setup, you need to make sure the following items are also configured properly in accordance with your local tax regulations.

  • Indicate Which Products and Services are Taxable
    When creating a tax zone you can specify whether a zone taxes products and services. If the zone collects taxes for either of these, you will need to make sure that the product or service is set as taxable.

  • Indicate Customers as Taxable or Tax Exempt
    When creating a customer, it is important to identify whether the customer is taxable or tax exempt. If a customer record is not set as taxable, taxes will not be generated or collected for those customers.

  • Make Sure Locations Have a Zip Code and Tax Rate
    To ensure the correct tax rate is applied to all work performed at a customer's location, be sure to include the zip code when creating a customer location. Work orders and invoices generated for customer locations that do not have a zip code will not have a tax rate associated with them.

    Also make sure the tax rate is set. If you add a new zip code to your tax zones you may need to go back and manually apply that tax rate to any existing customers in that tax zone.

  • Make Sure Tax Zones Are Setup Correctly
    Make sure your tax zones have the appropriate tax rate applied. It is possible to create tax zones with no taxes associated with them.


    Remember that Tax Zones can indicate whether to collect tax on products or services. Be sure this is configured correctly in order to collect the correct amount of tax for your jurisdiction.


    You should also confirm that all zip codes you service are assigned to the correct tax zone. If a zip code is not assigned to a tax zone, tax may not be collected for any work performed in that zip code.


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