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Resolving QuickBooks Tax Mappings Issues

How do I avoid 'Based on location' tax problems in QuickBooks.

Timothy Barnes avatar
Written by Timothy Barnes
Updated over 11 months ago

If There is a tax mapping issue between Gazelle an Quickbooks you will see a notice at the top of the invoice after syncing.




Most common scenario: Tax Mapping Issue

Quickbooks has a 'Automatic Sales Tax' (AST) feature that assigns taxes based on location. This feature often causes tax mapping issues because Quickbooks does not make it easy to differentiate these AST tax rates from 'Custom Tax Rates' you must create in Quickbooks inorder to properly map your Gazelle Sales Tax rates.

Here is a problem you might encounter:
If your Gazelle sales tax mappings are not mapped properly this can cause QuickBooks' AST / 'Based on location' sales taxes to override the tax selection on your Gazelle invoice, causing headaches and reconciliation issues that will need to be addressed.

Here is what to do about this:

First, make sure all your Quickbooks taxes were initially set up as 'Individual Tax rates' before they were bundled / combined into combined tax rates. NOTE: Don't 'Inactivate' any of your existing sales taxes. This will only complicate the matter. If you are unsure, contact support@gazelleapp.io, we can help answer this question for you.

Second, Ensure your Gazelle taxes are mapped to individual tax rates (not bundled tax rates) in Quickbooks.

Third, If you are required to add more than one sales tax to your invoice then make sure you also create a 'Combined' tax bundle in Quickbooks that links to the same custom individual tax rates your Gazelle sales taxes map to. You will need one QBO combined tax bundle will be needed for each combination of taxes you encounter.

For Example (In Gazelle):

Sales Tax 1 maps to Quickbooks 'Sales Tax 1'
Sales Tax 2 maps to Quickbooks 'Sales Tax 2'

Sales Tax 3 maps to Quickbooks 'Sales Tax 3'.

If you commonly combine sales tax 1 & 2; or 1 & 3; which is common if you have a state and county level sales tax (or you combine sales tax 1, 2 and 3 which is common if you have a state, county, and city sales taxes to report); then in Quickbooks you will need to also create 'Combined' tax bundles for all the various combinations that link to the individual sales taxes your Gazelle taxes are mapping to in Quickbooks.

Verify the Gazelle taxes map to the correct individual 'Custom Rate' in Quickbooks.

Unfortunately, QuickBooks does not give Gazelle a way to differentiate between the AST sales taxes and your 'Custom Sales Taxes' when you map these in Gazelle Settings > Accounting > Sales Tax Mapping (but there is a workaround). Here are the steps to take:

Step 1: Temporarily add a hyphen or identifying character in the name of your QuickBooks custom tax rates.

Step 2: Go to Gazelle > Settings > Accounting > Tax Mapping and make sure each of your Gazelle taxes map to one of these custom rates.


Step 3: (Optional) With your taxes properly mapped to your custom rates you will not need to change this again and you can go to QuickBooks > Taxes > Customer Rates > Edit to remove the hyphen or identifying character.

Step 4: Done.


Edge case scenario: QBO 'Hybrid Tax Experience' API authority issue

For legacy Quickbooks accounts (created before Spring of 2020) Quickbooks phased in a 'Hybrid Tax Experience' for all users but did not uniformly enable it at the API level on everyone's account. This can result in tax mismatch issue that appear like Quickbooks is not honoring the taxes or the tax mappings you configured in Gazelle and instead is mapping to the AST (Automated Sales Tax) they control. To resolve this you need to email support@gazelleapp.io and ask our team to file a request with Intuit to enable 'API Hybrid Tax Experience' support on your account. This usually takes 48 hours to resolve.


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