Wondering how to make shipping charge taxable in QuickBooks Online? Here's how!

If you are using Automated Sales Tax:

QuickBooks automatically calculates tax for shipping charge based on the rate in you state/area.

If you are using the Sales Tax Center:

The Shipping charge field on sales transactions doesn't provide a field to mark it as taxable and QuickBooks will NOT automatically calculate tax for shipping. To work around this, you need to create a product/service item for taxable shipping charges and use it on your sales transactions.

  1. Create the taxable shipping charge item.
    1. Select the Gear icon at the top, then Products and Services.
    2. In the Products and Services window, select the New button.
    3. Select Non-Inventory or Service for the product type.
    4. Leave the sales price/rate field blank.
    5. Select the appropriate Income account and check the Is taxable box.
    6. Select Save and close.
  2. Add the shipping charge as a line item on your sales transaction and select Tax box to the right so the tax will be applied.

Important! If you are going to use shipping charges as a Product/Service line item in order to add tax, make sure to leave the Shipping field blank so there is no duplication. The customary Shipping field will not appear on sales transactions if emailed or printed when the field is left blank.

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