How to Report and Pay Sales Taxes with QuickBooks Online

By Elaine Marmel

You or your client can manage and pay sales tax. Open any client QuickBooks Online company and, in the Navigation bar on the left, click Sales Taxes to display the Sales Tax Center shown here.

Use the Sales Tax Center to manage and pay sales tax.

Use the Sales Tax Center to manage and pay sales tax.

If the client QBO company uses QBO payroll (QBOP), you might need to click Taxes before you can click Sales Tax in the Navigation bar.

You can click the View Report button to display the Sales Tax Liability Report, and on the right side of the Sales Tax Center page, you’ll find a link to view a list of taxable customers.

Also on the right side of the page, you’ll find links you can use to edit sales tax settings and add or edit tax rates and agencies.

You can click Record Tax Payment to pay sales tax; when you do, QBO displays the Record Sales Tax Payment dialog box shown here.

Use this dialog box to record a sales tax payment.

Use this dialog box to record a sales tax payment.

QBO calculates the amount due to a sales tax agency, and you can confirm the amount or adjust it. Notice that the payment is made to the sales tax agency. Be aware that QBO doesn’t treat the agency as a vendor. You won’t see the sales tax agency on the Vendor List page, and you can’t use the Check window or the Pay Bills window to pay a sales tax agency. In this way, QBO helps avoid applying sales tax payments incorrectly.