Want to set up a new sales tax code but don't know which option to use?  Here are some guidelines:

  1. Select Taxes from the left menu
  2. Select Sales Tax at the top. (Tip: If you use payroll in QuickBooks Online, you may need to select Sales Tax as opposed to Payroll Tax)
  3. Select Manage sales tax
  4. Select Add tax
  5. Under What type of tax do you want to add?, select Add next to one of the below options and follow the prompts to complete set up
    • Provincial
      • This option will automatically set up any new agencies necessary (such as new PST agencies) and the most common codes for that province/territory. It will prompt you to choose a province or territory from the drop-down. Tip: Only provinces that you haven't yet set up will be listed.
    • Group rate
    • Custom
  • This option is rarely used, since any code recorded this way will explicitly NOT REPORT to any Federal or Provincial Tax Agencies (i.e., Canada Revenue Agency, Receiver General, etc), and won't help with filing/reporting to these types of agencies
  • You can add a tax in this category specific to your industry, such as tobacco, hotel, or gasoline tax. It could also be used to track sales to U.S. customers. Another use could be to set up a proper “out-of-scope” tax code to indicate that the sale/expense doesn't fall under any tax, if the company doesn't have one for any reason.
  • Custom tax MUST be in a percentage format, not a particular dollar amount ($)

Add a custom sales tax tax rate for an existing sales tax agency

This option will allow you to manually set up a tax for one of the existing agencies (i.e., Receiver General, Canada Revenue Agency, etc). This can be used for tax rate changes and other special tax rates. It's better to add an additional tax code than to change the existing one so all sales tax rates for that agency would show on the same return.

  1. Select Taxes from the left menu
  2. Select Sales Tax at the top. (Tip: If you use payroll in QuickBooks Online, you may need to select Sales Tax as opposed to Payroll Tax)
  3. Select Manage sales tax
  4. Locate the sales tax agency you wish to add the new rate for, and select Add custom rate