Adding and editing tax items

For each tax you report, you must set up a tax item. If a tax rate changes (such as a state sales tax increase), you can edit the tax item to change the rate.

To add or edit a tax item:

  1. Choose Lists > Items.
  2. Add a new item or open an existing item.
  3. From the Type list, select Sales Tax Item.
  4. Enter a tax name.

    This name becomes one of the available sales tax choices when you fill in a sales form.

  5. Enter a description to describe this sales tax on your sales forms.

    The description prints on your sales forms after the final line item. You cannot edit it on the forms themselves.

  6. Enter the tax rate.

    QuickBooks assumes the rate is a percentage. For example, enter 7.25 if the rate is 7.25%.

  7. Enter the tax agency to whom you pay the tax.

    If the tax agency is not already on your Vendor list, QuickBooks adds it to your list now.