How do I apply taxes in the United States for QuickBooks Online Canada?

Introduction

Many QuickBooks Canada customers sell in the United States. These companies must pay tax. At Connex, we recommend creating a specific tax code.

What are the steps?

Create a tax rate and create a Connex rule.

Step 1: Create a California Tax Agency and Rate

1. Go to Taxes in the left-hand navigation menu. (Go to https://qbo.intuit.com/app/tax/manage)
2. Click on Manage Sales Tax.
3. Select Add tax.
4. Choose Add custom rate instead of selecting a province.
5. Fill out the details:
   • Tax Name: Enter California Sales Tax or a specific code like CA ST.
   • Agency Name: Type California Department of Tax and Fee Administration (CDTFA) or create a simplified agency profile.
   • Rate: Enter the applicable percentage (e.g., California's base state rate is 7.25%, though local district taxes vary).
   • Account: Link it to your Sales Tax Liability tracking account.

Step 2: Create Rules in Connex

You need to write rules saying map order item, shipping and discount taxes for California. Here are the steps:

1. In Connex, click rules engine.
2. Click add new rule.
3. Choose rule without an order number.
4. In the name field, enter CA order item tax.
5. In the action, choose map tax code on order items.
6. In conditions, enter Shipping State, Equals, CA.
7. In the last text box, enter CA ST. 
8. Perform the same steps. For the action, enter map shipping line tax code and map tax code on discount.

Here is an example sale in QuickBooks: