Choose your tax setup (QuickBooks Desktop Canada)Last updated on 02/28/2023

• ServiceTitan is not responsible for knowing the tax rules of your jurisdiction. We have listed the basis of some tax laws to help jump-start the setup.

• When setting up your account for sales tax, you may need to ask your success or implementation manager for certain features to be made available to you:

  • Allowing multiple tax rates per Tax Zone

  • Allowing separate tax rates for labor and materials

  • Allowing technicians to set sales tax status per item while out in the field

  • Setting all commercial customers as taxable and residential customers as non-taxable by default

  • Automatically changing the sales tax status for the location to be the same as the sales tax status for the bill-to customer

There are various ways to set up sales tax based on the sales tax needs of your company. Please read through each option to find which option best fits your needs.

Tax by tax zone

Note: This is the sales tax setup method we recommend for most businesses.

One tax rate per Tax Zone

1. Go to Settings > Invoicing > Tax Zones.

2. Click Add Tax Zone.

3. Enter a Name for the tax zone. Example, “Toronto” or “York Region“.

4. Enter a Tax Rate.

5. Enter the zip codes you service into the ZipCodes field. This is how ServiceTitan determines which tax zones are assigned to your customers.

   • If you have certain sales tax rates that only apply to one or more zip codes, enter that zip code or those zip codes.

   • If you have one rate for all zones for your business, you can enter an asterisk (*) instead of listing the zip codes. This will assign the tax zone to every customer by default, unless their address has a zip code that is listed in another tax zone.

   • If you don’t want taxes to be calculated, and instead want taxes applied on a job-by-job basis for the zone, leave ZipCodes blank.

6. Click Save and repeat for each tax zone as necessary.

7. After creating the tax zones, click Set Tax Zones. This applies the changes and assigns your customers their respective tax zones.

Multiple tax rates per Tax Zone

1. Go to Settings > Invoicing > Tax Zones.

2. Click Add Tax Zone.

3. Enter a Name for the tax zone. Example, “Ontario” or “Greater Toronto Area“.

4. Select Charge multiple taxes for this zone.

5. Enter a Tax Name for each rate as required. Example, “Toronto” or “Durham”.

6. Enter a Tax Rate. Click Add Another for each of the remaining rates you need to add.

7. For zip codes, enter information as it applies to your business:

   • If you have certain sales tax rates that only apply to one or more zip codes, enter that zip code or those zip codes.

   • If you have one rate for all zones for your business, you can enter an asterisk (*) instead of listing the zip codes. This will assign the tax zone to every customer by default, unless their address has a zip code that is listed in another tax zone.

   • If you do not want taxes to be calculated and instead applied on a job-by-job basis for the zone, leave ZipCodes blank.

8. Click Save and repeat for each tax zone as necessary.

9. After you have created the tax zones, click Set Tax Zones. This applies the changes and assigns your customers their respective tax zones.

Invoices assigned to these kinds of tax zones will combine the rates you’ve set up.

Separate taxes for labor and materials

1. Go to Settings > Invoicing > Tax Zones.

2. Click Add Tax Zone.

3. Enter a Name for the tax zone. Example, “Toronto” or “York Region“.

4. Select Charge different tax rate for labor and materials.

5. Enter a Labor Tax Rate and a Material Tax Rate.

6. Enter the zip codes you service into the ZipCodes field. This is how ServiceTitan determines which tax zones are assigned to your customers.

   • If you have certain sales tax rates that only apply to one or more zip codes, enter that zip code or those zip codes.

   • If you have one rate for all zones for your business, you can enter an asterisk (*) instead of listing the zip codes. This will assign the tax zone to every customer by default, unless their address has a zip code that is listed in another tax zone.

   • If you don’t want taxes to be calculated, and instead want taxes applied on a job-by-job basis for the zone, leave ZipCodes blank.

7. Click Save and repeat for each tax zone as necessary.

8. After you have created the tax zones, click Set Tax Zones. This applies the changes and assigns your customers their respective tax zones.

By item

To exempt a particular item from sales tax, leave Taxable unchecked when creating it in the pricebook.

To learn more, see Adding Pricebook Items.

By customer or location

You can mark customer and location records as Non-taxable by clicking the Edit button. To learn more, see Manage customer and service location records.

ServiceTitan is unable to create sales tax items in QuickBooks Desktop. Because of this, you must set up tax zones and rates in QuickBooks Desktop. In QuickBooks, go to the Sales Tax tab to add GST/HST tax rates. To learn more, see the QuickBooks Desktop help topic explaining how to set up sales tax [EXTERNAL].

Add a default rate for all new customers

1. Click Lists and select Item List from the dropdown.

2. At the bottom of the window, open the Item menu and select New (or use the shortcut CTRL + N).

3. Select Sales Tax Item from the Type dropdown.

4. Enter a Tax Rate (%) or Amt.

5. Enter a Sales Tax Name. Example, “Sales Tax Payable” or “Default Tax Rate”. 

6. Select the appropriate vendor from the Tax Agency dropdown. 

7. Click OK.

See the QuickBooks Desktop homepage.