[Beta] Connecting TaxCloud to QuickBooks Online (Realtime Integration)

Connect Quickbooks Online with TaxCloud to calculate rates and automatically apply them to your invoices, track sales collected in each taxing jurisdiction, and simplify the filing process.

How the Integration Works

The TaxCloud integration for QuickBooks Online provides realtime tax calculations for invoices, replacing the built-in Automated Sales Tax (AST) by QuickBooks. When you save a change to a QuickBooks Online invoice, TaxCloud calculates tax and updates the invoice in the background.

Considerations

We recommend using Google Chrome, Mozilla Firefox, or Microsoft Edge to set up the integration.

TaxCloud

• You must be on the TaxCloud Premium plan to use this integration.
• If you have multiple QuickBooks Online companies, set up the TaxCloud integration for each company.
• TaxCloud must be configured to collect taxes in the state(s) where you invoice customers.

QuickBooks Online

• Setting up the integration automatically creates:
  • A QuickBooks Online Account that is used to track tax liability. We recommend using this account for auditing purposes only.
  • A QuickBooks Online Product Item that is used to calculate tax.
• You cannot use Automated Sales Tax (AST) by QuickBooks alongside TaxCloud; this guide will walk you through disabling it.
• Each invoiced customer must have a valid shipping address.
• Invoices will not show tax information immediately upon creation. To view taxes, refresh or close and then reopen the invoice.
• Tax exemption is controlled in QuickBooks Online at the customer level.

Before you begin

• Make sure you have admin permissions in QuickBooks online.
• If you have previously used a different sales tax integration with QuickBooks Online, disable and uninstall it before setting up the TaxCloud integration.

Step 1: Stop using QuickBooks Online AST

To avoid double taxation, you must stop using Automated Sales Tax (AST) by QuickBooks Online before you set up TaxCloud. Perform the steps in one of the following sections based on whether you are a new or existing QuickBooks Online customer.

Option A: New QuickBooks Online Customers

Complete these steps if you haven’t run any transactions in QuickBooks Online. Doing so sets the AST rates to 0% to avoid double taxation.

1. In QuickBooks Online, go to Taxes > Sales Tax.

   

2. Click Sales Tax Settings.

   Disable each tax agency by clicking Edit > Make inactive.

   

   Add a custom tax rate for TaxCloud to avoid double taxation.

   Select this rate on every invoice.

   1. Under Custom rates, click Add rate.
   2. Set the Name to TaxCloud.
   3. Set the Rate to 0.00.
   4. Click Save.

Option B: Existing QuickBooks Online Customers

Complete these steps if you have run one or more transactions in QuickBooks Online. Doing so sets the tax agency start dates to a future date, which avoids double taxation.

1. In QuickBooks Online, go to Taxes > Sales Tax.

   

2. Click Sales Tax Settings.
3. Set each tax agency start date to a date far in the future:
   1. Next to the agency, click Edit.

   2. Set the Start date to 1/1/2099.

      

      Add a custom tax rate for TaxCloud to avoid double taxation.

      Select this rate on every invoice.

   3. Under Custom rates, click Add rate.
   4. Set the Name to TaxCloud.
   5. Set the Rate to 0.00.
   6. Click Save.

Step 2: Set up the connection in TaxCloud

In TaxCloud, set up the connection to QuickBooks Online.

1. Go to the Integrations page.
2. Click Add Connection, then click QuickBooks Online.

3. In the top-right corner, click Connect.

   

4. If prompted, sign in to your QuickBooks Online account.

5. If you have multiple QuickBooks Online companies, select the company that you would like to connect, then click Next.

   

6. Click Connect to authorize the connection.

   

7. You return to the integration page.

8. Set the TIC (Taxability Information Code). Search to find the TIC that best fits the goods or services that you sell. If there is no match, enter 0.

   

9. Click Save.

Step 3: Generate a test invoice

Create a test invoice to confirm that TaxCloud is calculating tax rates. 

Create the invoice

When you create the invoice:

• Make sure the customer has a billing address configured.
• Set the tax rate to the “TaxCloud 0%” rate you created in Step 1.
• Each time you save the invoice, you must close and reopen the invoice before making any additional changes.

Save the invoice to have TaxCloud calculate taxes.

Refresh to view the calculated taxes

Due to QuickBooks Online limitations, sales taxes calculated by TaxCloud do not immediately appear. 

There are two ways to view updated taxes after saving the invoice:

• Refresh the page. 
• Close the invoice and open it again.

Taxes appear as an individual tax line item for each invoice item.

Step 4: Set the integration live

After you’re done testing, you can set the integration live in TaxCloud. After this point, all captured transactions are included in reporting and tax remittance. 

1. From the TaxCloud app, go to the Integrations page.
2. Click the QuickBooks Online connection.
3. In the top right corner of the page, click Go Live, then confirm your choice.

Managing exempt customers

Tax exemption for invoices is controlled in QuickBooks Online at the customer level. To ensure that tax filings are done correctly, add an exemption certificate to TaxCloud for each exempt customer before you invoice them.

1. In QuickBooks Online, mark the customer exempt.
   1. Go to Sales, then select Customers.
   2. Select the customer, then click Edit.
   3. Under Additional info, enable This customer is tax exempt. 
   4. Select why they’re tax exempt in the Reason for exemption dropdown.
   5. Click Save.
2. Copy the customer ID from QuickBooks online.

   1. While you are viewing the customer, look at the URL in your browser’s address bar. For example:

      https://app.qbo.intuit.com/app/customerdetail?nameId=12345

   2. Copy the number at the end of the URL. In the example above, the customer ID is 12345 .
3. In TaxCloud, add an exemption certificate for the customer. Use the customer ID you copied in the previous step.