Set up QuickBooks Desktop for sales tax (US)

Overview

After you’ve set up ServiceTitan for sales tax tracking, you’re ready to set up QuickBooks Desktop (QBD) for sales tax tracking. This allows you to track sales tax in your transactions.

Note: This setup outlines the steps needed to set up sales tax in QuickBooks in the US only. To set up sales tax in QuickBooks for Canada, see Set up QuickBooks Desktop for sales tax in Canada.

Things to know

• Sales tax is calculated in ServiceTitan and exported to QuickBooks as a line item.

• Each sales tax rate in ServiceTitan is mapped to a sales tax item in QuickBooks.

• QBD does not create the ServiceTitan Sales Tax service item automatically. You need to create this service item manually in QBD.

• Add the ServiceTitan Sales Tax service item to ServiceTitan tax zones so it’s included as an item in exported invoices which displays the tax amount that ServiceTitan calculated. This helps you validate tax calculations in ServiceTitan with QBD.

Step 1: Turn on sales tax in QuickBooks Desktop

Sales tax needs to be turned on in QuickBooks, even though sales tax will be calculated in ServiceTitan. This is because having sales tax turned on allows you to create sales tax payable items. When sales tax is exported from ServiceTitan, it’s linked to these sales tax items.

To turn on sales tax in QuickBooks:

1. Ensure you are signed in to QuickBooks as the administrator in Single-user mode. To switch between Multi-user and Single-user mode, go to File > Switch to Multi-user Mode/Single-user Mode.

2. Go to Edit > Preferences > Sales Tax > Company Preferences.

3. Select Yes for Do you charge sales tax?

   
   

4. Click OK. This automatically creates a Sales Tax Payable general ledger account. Your sales tax items will be mapped to this account.

Step 2: Create an Other Liability Account type

In QuickBooks, create an account with an Account Type of Other Liability Account and label it ST Sales Tax. This is used to map the service type item and must be separate from the QB 25500 Sales Tax Payable. This is so only legitimate sales tax will show in the tax report.

Step 3: Create a service type item for ServiceTitan Sales Tax

Next, create an item in QuickBooks with Service as the Type and label it as ServiceTitan Sales Tax. This item is referenced in the Sales Tax Item field in ServiceTitan when you map your tax zones in ServiceTitan. 

Note: Because this is referenced in ServiceTitan, make sure the name matches exactly what is specified in ServiceTitan.

Select the ST Sales Tax account you created in step 2 under Account.

Step 4: Create QuickBooks items for each tax zone

A sales tax item needs to be set up in the Item List in QuickBooks for each sales tax you want to track. Each item you create is used in QuickBooks to represent a sales tax item. This needs to be done before exporting from ServiceTitan.

Note: The sales tax items and sales tax groups must match exactly with ServiceTitan in order to use the auto-map feature.

1. Enter the following information into the New Item window. These items are automatically mapped to the Sales Tax Payable account.

   1. Type: Sales Tax Item.

   2. Sales Tax Name: Variable. This should match the tax zone/tax rate name used in ServiceTitan.

   3. Tax Rate: Variable. This is the tax rate.

   4. Tax Agency: Variable. This is the vendor you will pay the sales tax to.
       

2. Click OK. The item should now be visible in your QuickBooks Item List.
    

You can now begin mapping ServiceTitan tax zones to QuickBooks Desktop tax rates.

Step 5: Map the QuickBooks sales tax item to tax zones

To map your QuickBooks sales tax item to the corresponding ServiceTitan tax zones: 

1. In ServiceTitan, go to the navigation bar and click Settings .

2. In the side panel, go to Invoicing > Tax Zones.

3. On the Tax Zones screen, find the appropriate tax zone associated with the sales tax item and click Edit .

   
   

4. Enter the name of the QuickBooks item in the Sales Tax Item field. This ensures the sales tax maps to the correct item when exported to QuickBooks. 
    

5. When finished, click Save.

Step 6: Assign the ServiceTitan tax zones to the QuickBooks items

To assign your ServiceTitan tax zones to the corresponding QuickBooks sales tax items:

1. In ServiceTitan, go to the navigation bar and click Settings .

2. In the side panel, go to Integrations > QuickBooks Desktop.

3. On the Settings screen that opens, find Tax Zones Assigned and click Edit.
    

4. On the Map Sales Tax Zones screen that opens, click Auto-Map or you can manually select the QuickBooks tax item to map to the ServiceTitan tax zone.
    

5. When finished, click Save & Next through the rest of the settings.

Washington sales tax

If you run your business in Washington state, it is important for auditing purposes to set the local sales tax zone correctly. For more, see Washington State sales tax.

Important: Enabling Washington State sales tax zones removes all existing Tax Zones Assigned mappings from your QuickBooks Desktop integration settings.

Before you enable Washington State sales tax, go to Settings > Integrations > QuickBooks Desktop > Tax Zones Assigned and record your current mappings. After the feature is enabled, re-map your tax zones by following Step 6 above.

Run a QuickReport for sales tax liabilities

You can run a QuickReport to see your liabilities for each sales tax. 

To run the QuickReport:

1. In QuickBooks Desktop, go to Lists > Item List.

2. In the Look for search bar, enter the name of the sales tax.

3. At the bottom of the window, select Reports > QuickReport.

   
   

Want to learn more?

• See Set up sales tax in ServiceTitan

• See Set up QuickBooks Desktop for sales tax (Canada)

• See Export sales tax to QuickBooks Desktop

• See Washington State sales tax

• See Enhanced Sales Tax Setup for QBD Checklist