--- title: "Calculating and capturing tax in QuickBooks Desktop" description: "Once the plugin is installed and connected, it adds tax to your transactions automatically. This article covers what you need in place, how to confirm it's working, and what happens on every save — including edits, voids, and refunds." canonical_url: "https://support.taxcloud.com/articles/calculating-and-capturing-tax-in-quickbooks-desktop-1YWKditL4Z" md_url: "https://support.taxcloud.com/articles/calculating-and-capturing-tax-in-quickbooks-desktop-1YWKditL4Z.md" --- # Calculating and capturing tax in QuickBooks Desktop Once the plugin is installed and connected, it adds tax to your transactions automatically. This article covers what you need in place, how to confirm it's working, and what happens on every save — including edits, voids, and refunds. **Before you start,** make sure you've completed: 1. **[Set up your TaxCloud account](https://support.taxcloud.com/en-us/articles/set-up-your-taxcloud-account-for-quickbooks-desktop-qPQgfTk5ES)** — connection, API key, and the states where you collect. 2. **[Install the TaxCloud QuickBooks Plugin](https://support.taxcloud.com/en-us/articles/install-the-taxcloud-quickbooks-plugin-9q9kyzkynC)** — including entering your API Key and Connection ID in the plugin and granting it access to your company file. ## What tax calculation needs For the plugin to calculate and post tax on a transaction, all of these must be true: * The plugin is **running** and connected. * The customer's **Tax Code** is **Tax** (not **Non** — a **Non** customer is treated as exempt; see **[Mark a customer tax-exempt](https://support.taxcloud.com/en-us/articles/mark-a-customer-tax-exempt-in-quickbooks-desktop-zo7zb1LeKW)**). * The invoice's **TAX** dropdown is set to **TaxCloud Tax**. * The customer has a **real, complete ship-to (or bill-to) address**. TaxCloud calculates tax from the destination address; a missing or invalid address means it can't return a rate. * Your **company file has a real address**. TaxCloud calculates from origin to destination, so your own company address is the ship-from origin. The plugin reads it from **Company → My Company** (the **Company Name & Address**, or the **Legal Name & Address** if that's blank), so it must be a complete US address. * **Tax collection is enabled** for that destination state in TaxCloud (a state you haven't turned on returns $0 by design). * The transaction has at least one line with a quantity and price, and at least one taxable line. If tax doesn't appear, re-check the list above. The plugin's **Capture History** tab (in Settings) lists what it has captured; if a transaction isn't there, its skip reason is in the debug log — see **[Troubleshooting](https://support.taxcloud.com/en-us/articles/troubleshooting-the-taxcloud-quickbooks-plugin-aKbKmVr8SO)**. ## Run a test invoice 1. In QuickBooks, go to **Customers → Create Invoices**. 2. Pick a customer whose **Tax Code** is **Tax** and whose **Ship To** address is a real address in a state you've turned on. 3. Add at least one taxable line item. 4. At the bottom of the invoice, set the **TAX** dropdown to **TaxCloud Tax**. (The plugin creates this entry on its first sync — if it's missing, save once with any tax item and it'll appear.) 5. Click **Save & Close**. 6. Reopen the invoice from **Customers → Customer Center → Transactions**. You should see a **TaxCloud Sales Tax** line with the calculated amount. That means it's working. ![Invoice with the TAX dropdown set to TaxCloud Tax and a TaxCloud Sales Tax line](https://support.taxcloud.com/api/attachments.redirect?id=cc8c6349-6b90-44df-b7cc-224f755037c7 " =2404x1492") :::info QuickBooks doesn't always refresh the invoice in the window where you saved it. If you don't see the tax line right away, close it and reopen from the Customer Center — it's always there on the next open. ::: ## What happens on every save When you save an invoice, the plugin does this automatically — there's no "Calculate Tax" button: 1. QuickBooks tells the plugin the invoice was saved. 2. The plugin reads the invoice (customer, ship-to address, line items). 3. It calls TaxCloud to calculate tax. 4. It writes a **TaxCloud Sales Tax** line back onto the invoice. 5. It records the invoice in TaxCloud for filing. This usually takes a couple of seconds. ## Where the tax posts The plugin adds tax as a **Service** item called **TaxCloud Sales Tax**, mapped to an **Other Current Liability** account called **TaxCloud Sales Tax Payable** (both created automatically on first use). Collected tax shows on your **Balance Sheet** under Current Liabilities, not as income. When you remit tax to a state (or through TaxCloud's filing service), record it against that liability account. The plugin doesn't record remittances — that's a manual bookkeeping step. ## Editing, voiding, and deleting * **Edit an invoice:** change a line and save again; the plugin updates the existing tax line in place (it won't add a second one). * **Void an invoice:** the plugin sees the tax drop to zero and updates TaxCloud, so your filing total drops by that amount. * **Delete an invoice:** prefer **Void** over **Delete**. A deleted invoice can't be seen on the next sync, so its recorded tax isn't automatically removed from TaxCloud. If you must delete one the plugin already recorded, contact support so we can reverse it. ## Sales receipts A sales receipt is a sale plus payment in one document. The plugin records it in TaxCloud for filing immediately on save — there's no payment to wait for. ## Sales orders and estimates Sales orders and estimates are **not** synced to TaxCloud — no tax is calculated or recorded on them. They're pre-sale documents (a quote, or an order you haven't invoiced yet), and tax isn't owed until they become an **invoice** or **sales receipt**. Convert the sales order or estimate to an invoice, and the plugin calculates and records tax at that point. :::info Sales orders exist only in QuickBooks Desktop **Premier** and **Enterprise** (not Pro). Estimates are available in all editions once you turn them on under **Edit → Preferences → Jobs & Estimates**. ::: ## Refunds and credit memos To refund tax, issue a **Credit Memo** in QuickBooks (**Customers → Create Credit Memos/Refunds**) — that's how QuickBooks Desktop records refunds. It posts to TaxCloud as its own credit that reduces your total collected tax for the period. * **Partial and repeat refunds all record.** Each credit memo is recorded independently, so multiple partial refunds against the same original sale all reduce your filing total correctly. * **A refund shows as its own credit.** On the TaxCloud dashboard, a refund appears as a separate negative order — the original invoice still shows its full tax. Your filing totals are correct; TaxCloud just doesn't re-link the refund to the original invoice. * For unusual cases (for example, reconciling a manually renumbered credit memo), contact support.