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Exporting Taxes Overview

  • Updated

When orders that contain taxes are exported over from your store, QuickBooks Sync uses a tax agency account from your QuickBooks Online account to map the sales tax collected from Shopify.

More details on tax matching with sales and shipping tax can be found below.



Tax matching and creation

Order with Tax Example

Using the order in the example above with a GST and RST tax in Shopify, when the order is exported from Shopify to your QuickBooks Online account, QuickBooks Sync uses the tax agency selected for the Shopify location on the settings page. If this order was exported without an agency selected, an error is generated that prompts you to select a tax agency. To resolve the error, you need to create a new tax agency in your QuickBooks Online account for this location.

Tax Agency Error

When an order is exported, QuickBooks Sync tries to find a tax code for every line item and shipping line on the order using the following criteria:

  • The order resides within a selected tax agency in QuickBooks Sync.
  • The tax code rates have the same percentages as the tax rates in Shopify.
    • Example: For an order that contains a 5% tax rate and 7% tax rate, a single 12% tax code would not be selected.
  • The tax code is not archived

If no tax codes match these criteria, a new tax code will be created in your QuickBooks Online account that combines all of the rate names and adds Shopify to the start.

Tax code example

If multiple tax codes match this criteria, Quickbooks Sync will try the following in order:

  • Select the first if they are all duplicates of each other.

  • Select the tax code where all of the tax rates match the Shopify tax titles exactly.

    • RST and GST for the example above.

    • The word State can also match Sales (for example New York State Tax in Shopify and New York Sales Tax in QuickBooks Online)

  • Select the code where all of the Shopify tax titles can be found in the tax rate names or vice versa

    • Using the example above, Shopify GST @5% includes the Shopify tax GST.

  • Select the tax code with the province/state name present in the title.

If a single tax code in QuickBooks Online cannot be found where it matches the above criteria and all other tax codes do not, the order will fail to export and list out the taxes it was not able to disambiguate between.

Tax errors

This can be solved by either:

  1. Marking one of these taxes as inactive in QuickBooks Online.
  2. Setting the Shopify tax as the default in the settings page.

Setting Configurations in QuickBooks Online



Shipping taxes

Order with Taxes

Shipping is always taxed if shipping was taxed in Shopify. Using the example above, this order contains:

  • 12% GST & RST tax the line item ($50 * 1.12 = $56).
  • 5% GST tax the shipping line ($14.90 * 1.05 = $15.645, rounded up to $15.65).

QuickBooks Online has a limitation for US companies where there can only be a single tax code for the entire order. In cases like the above, QuickBooks Online will state that the 12% tax code is used, even though only 5% applied to shipping. In order to keep the total tax amount the same between QuickBooks Online and Shopify, QuickBooks Sync overrides the tax amount to match Shopify, even though the expected total would be $64.90*1.12 = $72.69.

Sales Receipt in QuickBooks Online

Note: For non-US companies, QuickBooks Online will show a 12% tax on the line item and 5% tax on the shipping to match Shopify.

Shipping Tax Code Example