This article describes the process for configuring taxes in QuickBooks Online (QBO) to work with Datto Autotask PSA.
- Datto Autotask PSA
- QuickBooks Online (QBO)
To edit tax rates in QuickBooks Online:
- Open QuickBooks and click Select Taxes from the panel on the left.
- Under Related Tasks, select Add/edit tax rates and agencies.
- Select the tax rate you want to edit, and then click Edit.
FOR US CUSTOMERS, if automated sales tax is not enabled
- If Automated Sales Tax IS NOT ENABLED in QuickBooks, the name of the Tax Rate in QuickBooks needs to match the name of the Tax Region in Autotask.
- QuickBooks Online applies one aggregate tax rate to the entire invoice, instead of breaking out the taxes line by line as in Autotask.
- For example, you have a tax region in Autotask called State Tax, with tax categories Tax 1 at 2% and Tax 2 at 3%, making the total tax for the region 5%. You have a combined tax rate in QuickBooks Online called State Tax, with components Tax 1 at 2% and Tax 2 at 3%, making the total tax rate also 5%.
- You create an invoice with two billing items at $100 each, with Billing Item 1 with Tax 1 applied and Billing Item 2 with Tax 2 applied. In Autotask, the tax would apply to each line item.
- Billing Item 1 is taxed $2, and Billing Item 2 is taxed $3. In Autotask, the tax total would be $5.
- When the invoice transfers to QuickBooks, QuickBooks looks at the tax region for the Autotask account to know what QuickBooks tax rate to apply. It then uses the aggregate tax amount for the tax rate in QuickBooks.
- The invoice, once transferred to QuickBooks, would show a total tax of $20 as it is applying the 10% tax rate total to the invoice and not 2% and 3% to the respective individual items.
FOR US CUSTOMERS, if automated sales tax is enabled
- If Automated Sales Tax (AST) IS ENABLED in QuickBooks, you do not have to use it. However, if you do prefer to use AST, you must select the desired address to be used for tax calculation in the Autotask Invoices App Settings. The chosen address setting is what the application uses to determine the tax locale, and in turn, perform the tax calculation automatically.
FOR NON-US CUSTOMERS
- QuickBooks applies a single tax rate to each invoice line.
- QuickBooks determines the tax rate by looking at the Autotask account's tax region. It then looks at the Autotask billing code of each of the line items on the invoice. The combination of the tax region from the account and the tax category from the billing code is how the tax is determined.
- Keep in mind that ONLY ONE tax rate can match to a line in QuickBooks. Autotask allows more than one tax rate to apply to any given invoice line. For example, in Canada, some users may set up a GST tax rate and a separate Province tax rate. Only one of these tax rates can assign to a line in QuickBooks. Therefore, to get around this limitation, we recommend creating an aggregate tax rate in Autotask that represents GST plus applicable province tax, for each province.
- See the below graphic for more information.