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QuoteWerks Help
Version 24 (Build 1.04) 
December 12, 2023


Important:   The following is a very simplified explanation of the sales tax systems of the USA and Canada. It's meant to give you a general understanding of these systems, and may not be 100% comprehensive. This is not meant to be sales tax advice; please consult your accountant for sales tax advice.

Note:Australian and UK tax systems are similar to the USA's, so for Australian and UK users, choose the USA tax system.

USA Sales Tax

Each state in the USA has different Sales Tax rules, rates, and requirements. Some are really simple and straight forward and some are very complicated. Generally speaking an item is either taxable or non-taxable and the sales tax is based on the selling price of the item.

Generally speaking, Sales Tax is charged based on the location where the product is shipped to or services are performed. The Sales Tax collected and the rules for the amount collected comes down to knowing exactly where the location is, in terms of the State, County, and City.

You cannot base the Sales tax simply on the 5 digit zip code because zip codes can span more than one county and different counties have different Sales Tax rules. So bottom line, you need to know the zip+4 postal code like 32819-1234 or you need to know the street number and street name.

Each state in the USA has different Sales Tax rules, rates, and requirements. Some are really simple and straight forward and some are very complicated.

For states that have a simple sales tax system, when selling to a customer located at a particular address, your business would need to collect, for example, 6.00% sales tax for the State, and .5% for the county, for a combined amount of 6.5%. These states either collect sales tax on products and services, or only on products. To calculate the total sales tax you need to collect from your customer you just add up the taxable amount of all the items and multiple by 6.5%, and round to the nearest penny. This is how QuickBooks Desktop calculated sales tax 30 years ago, and it is still how it calculates tax in 2023. QuoteWerks is designed to calculate taxes this same way as it has been a standard and ensures that the sales tax QuoteWerks calculates will match the amount of sales tax that QuickBooks calculates when QuoteWerks exports an invoice to QuickBooks.

Selecting the USA Tax System
Under the Tools -> Options menu, select the Regional tab.

Select "United States" from the Base sales tax calculations on country drop-down box.

Setting the Default Tax Rate

Under the Documents tab, in the Sales Tax Rate field, enter the most common sales tax rate you’ll be using when quoting. This will be the default rate that is used for all new quotes, orders, and invoices.

Setting the Default Tax Code

Under the Document Items tab, select the default Tax Code to be used for all line items added to the quote manually. So, for line items you add to the quote from a Product Data Source, the tax code will come from there.

Shipping Tax Code

On the Documents tab, you can set the default tax code for the shipping amount from the Shipping Tax Code drop-down box. When adding shipping to the quote, you can choose the Tax Code at that time.


Related Topics:

Using Sales Tax in a Quote (USA)