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Handling U.S. Ecommerce Tax in QuickBooks Enterprise

Last updated 17/03/2021

How to handle US taxes on ecommerce and marketplace orders with QuickBooks Enterprise.

Overview


Ecommerce tax can be complicated, especially when you have to handle multiple states and counties across multiple sales channels. To make things easy, Cin7 has a special feature that allows you to preserve the fidelity of tax calculated on orders imported from integrated channels.

In order for this to work, you must meet the following prerequisites:

  • Your business must be based in the United States
  • Your QuickBooks Enterprise account is integrated with Cin7
  • Taxes are set up correctly in your ecommerce software - you've probably done this already
  • Have separate tax liability accounts for your Ecommerce sales tax (other than your default tax liability account) set up in your QuickBooks Enterprise account 
  • You have created a service in QuickBooks Enterprise and linked it to your tax liability account

It is also likely that you will use a separate tax filing/reporting automation software to ultimately figure out what you owe and to whom

Setting Up Ecommerce Taxes


To set this up:

  1. While logged in as an Administrator, select your username in the top right, then select Settings.
  2. Select Accounting.
  3. Select QBE Setup.
  4. Change the drop-down Upload Ecommerce Taxes Into Liability Account (U.S. Only) to Yes.
    You will see that underneath, a new field appears for each integration.
  5. Select the liability account from the drop-down list for each each ecommerce or marketplace.

Using this Feature


When an order is downloaded, the tax will be correctly preserved based on the ecommerce or marketplace's calculation. The appropriate tax will appear in the Alternative Tax Rate field in the Sales Order. The tax amount will be considered when calculating the total of the order.

Upon importing the order to QuickBooks Enterprise, the tax will be split and posted to the specified liability account.

Modifying Tax Rates

Note that if you modify a tax rate in the Alternative Tax Rate field at any stage and save the transaction, you will not be able to recreate the unique tax rate. Please modify this field with care!