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. The TaxCloud for QuickBooks Online browser extension gives you full control over when taxes are calculated for the invoice that you're working on.

Considerations

TaxCloud

• You must be on the TaxCloud Premium plan to use this integration.
• TaxCloud must be configured to collect taxes in the state(s) where you invoice customers.
• You must install the TaxCloud for QuickBooks Online browser extension to use the integration. The browser extension is compatible with Google Chrome and Microsoft Edge. Other browsers that support Chrome extensions may also work.

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.
• Tax exemption is controlled in QuickBooks Online at the customer level.

Before you begin

• Make sure you have admin permissions in QuickBooks Online.
• Verify that your QuickBooks Online company address in is set to a valid address. This is required to enable tax calculations.
• 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: Determine which Taxability Information Codes you need

Review the list of TaxCloud Taxability Information Codes (TICs) to determine which codes apply to the goods & services that you sell.

• If all of your goods and services fall under one TIC, you can set that up yourself.
• If you need to use multiple TICs, reach out to your TaxCloud Onboarding Specialist or contact Customer Support for assistance.

Step 2: Set up QuickBooks Online AST

If you're not already using Automated Sales Tax (AST) by QuickBooks Online, follow these instructions from Intuit to set it up now. You will be overriding these settings in the next section.

Step 3: Override QuickBooks Online AST

To avoid double taxation, you must adjust 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 4: 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) based on the research you performed in Step 1. 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 5: Set up the TaxCloud browser extension

The TaxCloud for QuickBooks Online browser extension gives you control over when taxes are added to your QuickBooks Online invoices.

The extension is compatible with Google Chrome and Microsoft Edge. Other browsers that support Chrome extensions may also work.

Step 5a: Install the browser extension

Get the TaxCloud for QuickBooks Online browser extension from the Chrome Web Store.

Step 5b: Generate an API key and find your connection ID

You'll need this information to authenticate the browser extension.

1. Generate a TaxCloud API key.
   1. Navigate to Developer > API.
   2. Click New API Key.

   3. Give the key a name, such as "QuickBooks Online Browser Extension".

      

   4. Click Finish Setup.
   5. Copy the new API key. You'll use it when you authenticate the browser extension.
2. Find the Connection ID for your QuickBooks Online connection in TaxCloud.
   1. Go to the Integrations page.
   2. Click the QuickBooks Online connection.

   3. Under Taxcloud API, copy the ConnectionID.

      

Step 5c: Authenticate the browser extension with TaxCloud

1. In the browser where you installed the browser extension, open the TaxCloud app.

2. Open the TaxCloud for QuickBooks Online browser extension.

   

3. Click Authenticate.

4. Enter the Connection ID and API Key that you copied previously in Step 3b.

   

5. Click Connect.

Step 6: Generate a test invoice

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

Create the invoice

When you create the invoice:

1. Make sure the invoice has valid Bill to, Ship to, and Ship from addresses.
2. Set the tax rate to the “TaxCloud 0%” rate you created in Step 1.
3. Make any edits that you need.
4. Save the invoice.

Use the browser extension to calculate taxes

When you're finished making changes to the Invoice, open the TaxCloud for QuickBooks Online browser extension and click Calculate Taxes. TaxCloud calculates the taxes, updates the invoice, and automatically refreshes the invoice to display the new tax information.

TaxCloud adds a new tax line item for each of the original line items.

Step 7: 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.