Shipping is a major function of almost every eCommerce business. In general, shipping is not taxable if listed separately from the price of the item.
Previously in QuickBooks Commerce, shipping rates were not being taxed automatically. The only way to include a tax fee on shipping was to manually edit the sales order, sometimes causing discrepancies during the checkout experience.
Now, we have implemented a new feature for your shipping rates to be auto-taxed. 😊
This is only applicable to businesses that require shipping charges to be taxed.
To set your shipping as taxable on an Account level
Step 1: Click the Settings tab on your main navigation bar and then, Configurations. You can manage/set up your ‘Default Settings’ to make shipping taxable (or not).
Step 2: Select the ‘Charge Tax on Shipping Rates’ option from the drop-down.
Now, click ‘Save Changes’.
If you make any changes to tax settings in your QuickBooks Commerce's account settings, only your newly created orders and invoices will reflect this change. Your existing invoices will remain unchanged.
To set your shipping as taxable on a Customer level
You can also manage more granular settings on a customer level to override the account’s default settings (if required) as not all countries require that you charge shipping on taxes.
For instance, shipping is not taxable for US customers, but it is taxable for UK customers.
You can manage/set this up on a customer level by:
Step 1: Click on the Relationships tab on your main navigation bar and search for the respective customer. Then, click on ‘Edit’ at the top right-hand corner of the page.
Step 2: Scroll down to the bottom of the page and toggle between the ‘Enable’ or ‘Disable’ options based on your customer.
*For instance, if your customer is based in the UK, select ‘Disable’.
If the tax on shipping is enabled for a buyer/customer, they should see the tax on shipping being automatically applied to their B2B store during checkout.
If no tax rate present for the customer, QuickBooks Commerce will pull the default sales tax rate from the account settings.