---
title: "Calculating Sales Tax on Estimates"
description: "Summary"
canonical_url: "https://support.taxcloud.com/articles/calculating-sales-tax-on-estimates-u5LBAqvQJz"
md_url: "https://support.taxcloud.com/articles/calculating-sales-tax-on-estimates-u5LBAqvQJz.md"
---
# Calculating Sales Tax on Estimates

## Summary

Estimates allow you to quote a price to a customer without finalizing a sale. This guide explains how to use TaxCloud to provide an accurate tax quote on an Estimate and explains why these transactions are treated as "lookups."

[Calculating Sales Tax with TaxCloud Integration in QuickBooks Online.mp4 1444x1052](https://support.taxcloud.com/api/attachments.redirect?id=8ce7fce1-4c27-480c-92ea-e40c9d7df31d&start=170&end=221)

## When to Use This

Use this process when you need to send a quote to a customer that includes sales tax, but the sale has not yet occurred.

## Step-by-Step Instructions


1. **Create an Estimate**: Navigate to **Sales** or the **+ New** menu and select **Estimate**.
2. **Fill Out Estimate Details**: Enter the customer, date, and product line items.
3. **Calculate Tax**: Click the **Calculate Tax** button from the TaxCloud integration.
4. **Review**: A sales tax line item will be added to the estimate, giving your customer a complete total.

## Important Note on "Lookups"

* **No Tax Liability Created**: Transactions marked as "Estimates" are treated as **Tax Lookups Only** in TaxCloud. They do **not** record a sale or create a tax liability in your TaxCloud reports.
* **Converting to a Sale**: To finalize the tax and record the transaction, you must eventually convert the Estimate into an **Invoice** or **Sales Receipt** within QuickBooks Online. Once converted, the resulting invoice or receipt will be captured as an order.