Some online platforms used for selling products are considered Marketplace Facilitators. This means that the platform is responsible for collecting and remitting sales tax. This removes the responsibility to collect and remit sales tax as a seller on those platforms. While QuickBooks Online can help you automate sales tax calculation and apply the correct rates to the correct products, it does not collect sales tax for you and is not a Marketplace Facilitator. 

Before you can use QuickBooks Online to calculate sales tax, it is important to evaluate where you have sales tax nexus and whether your products are taxable in those areas.  

Steps to Collecting Sales Tax:  

1. Complete a thorough sales tax nexus review for both physical nexus and economic nexus.  
2. Register necessary sales tax account.  
3. Obtain sales tax certificates.  
4. Enable sales tax collection on all required platforms for the registered jurisdictions.  
5. File sales tax returns and maintain sales tax accounts.  

Once you know which jurisdictions you have nexus in and go through the steps to register and obtain the right certificates, then you can program QuickBooks Online for sales tax calculation. 

Adding Tax Rates and Agencies 

QuickBooks refers to the jurisdictions you have nexus in as Tax Agencies. In QuickBooks Online Sales Tax setup, you can add and edit tax rates and agencies from the lefthand Navigation Menu. Your setup will look different depending upon whether you file sales tax outside the state you operate. You can also assign a Filing Frequency to each agency you file with, ensuring you never miss a due date and incur those dreaded late fees. 

After you have added all your agencies, you can add Sales Tax Categories to your products. The sales tax categories you add comply to pre-determined Tax Rules for various products or services. You will have to do your own research as to what products and services need tax categories, but if you are ever uncertain, an accountant or tax professional can help. These tax rules differ from state-to-state and can change, which is why QuickBooks Online keeps track of it for you.  

After you complete the steps above, QuickBooks Online will be able to accurately calculate how much tax you have collected per sale. It does this by collecting the sales data you import via Invoices or Sales Receipts. Here is how to use the automated sales tax system: 

1. Create an Invoice or Sales Receipt. 
2. Double-check the Location of Sale. 
3. If the sale was ordered through a website or seller platform, add the Shipping to, Ship via, Shipping date, and Tracking no. info. 
4. Select See the Math or Total Tax Amount (which choice you have depends upon the type of QuickBooks Online subscription). 
5. The Let’s calculate your tax rate page will open. Here you can see a detailed breakdown of the sales tax. 
6. Review for accuracy and close. 
7. Select Save and Send.  

When all invoices and receipts for a filing period have been imported, QuickBooks will be able to give you the reports you need.