We told you during our QB Talks Webinar last week (11/20/19) that Intuit was in the process of updating the Sales Tax Center in QuickBooks Online. In reality they are 'migrating' the current Manual Sales Tax option to something they refer to as the 'Hybrid Sales Tax Experience1' according to Rashaad Childs, a Sr. Supportability Specialist on the Customer Experience Team at Intuit, who presented these changes during the most recent 'In The Know' QuickBooks Online Monthly Update Webinar held November 21 (2019).
The new experience provides updated 'visuals' throughout but continues to allow users to create and edit their own sales tax rates, generate sales tax liability reports and record sales tax payments. However, in order to continue using their own existing rates within the Manual Sales Tax option, users must match each of those manually established rates and their associated (manually established 'vendor') agencies against Intuit's verified list of U.S. Sales Tax agencies.
The new 'Hybrid Sales Tax Experience' is shown on the right in contrast to the current Manual Sales Tax feature in QBO as shown on the left. The new experience more closely approximates the 'Fully-automated Sales Tax Experience' which QBO offers. (Source: Adapted from Intuit’s In The Know Webinar Content)
2019 QBO Sales Tax Changes - Comparative views
Once transitioned, Intuit says that this new experience will provide users with "more organized reports, by reducing the amount of time spent hunting down the right numbers when the time comes to file (Sales Tax)."
User should begin seeing the change-over starting in mid-January, and Intuit anticipates that the changes should have migrated through the entire roll-out process by mid-February. ProAdvisors, Bookkeepers and Accountants supporting clients should expect to be contacted for assistance since all 'unverified rates' from the manual option will be 'inactive' (and unusable) until they are matched to one of the verified Sales Tax agencies in the new set-up.
Setting-up The New Experience
As part of this new 'Hybrid Sales Tax Experience' the Taxes tab within QuickBooks Online is also undergoing a companion change to make it easier to find the most important information when collecting and filing sales tax. As part of the conversion (or set-up) process the first step is to 'Double-check your address to make sure it's right', this is used as part of Sales Tax Agency verification process.
The second step (highlighted within the 'red box' in the illustration below) is to 'connect your old tax center (manual sales tax) agencies to the new 'hybrid experience' tax agencies'. Remember that this process takes place on a rate-by-rate basis for each of your existing (manual) sales tax rates.
New Hybrid Sales Tax Experience requires you to connect your old Manual Tax Center tax agencies to the new Hybrid Tax Experience tax agencies. ProAdvisors may get a lot of requests from their clients for assistance in this change, so plan for the the implementation. (Source: Adapted from Intuit’s In The Know Webinar Content)
2019 QBO Sales Tax Changes - Hybrid Experience Change-over Step 2A
For each Sales Tax Rate associated with an old (manual) sales tax center agency you must connect that rate to the new 'hybrid experience' tax agency from the drop down list of populated tax agencies based upon your address (as shown below).
In order to continue using 'manual rates' Users must match those rates against the verified Sales Tax agencies in the new 'Hybrid Sales Tax Experience.' (Source: Adapted from Intuit’s In The Know Webinar Content)
2019 QBO Sales Tax Changes - Hybrid Experience Change-over Step 2B
When all existing rates have been verified to the appropriate tax agencies (a green check-mark appears next to each agency for each rate, as shown below) the user will 'Save' their changes to complete the transition to the new 'Hybrid Sales Tax Experience.'
When all existing rates have been verified to the appropriate tax agencies a green checkmark appears next to each agency for each rate. (Source: Adapted from Intuit’s In The Know Webinar Content)
2019 QBO Sales Tax Changes - Hybrid Experience Change-over Step 2C
Preparing for The New Experience
As I mentioned, now is the time to start getting ready for this new (revised/revamped) sales tax experience if your clients are on QuickBooks Online and have been using the 'Manual Sales Tax' option rather than the Fully-automated Sales Tax feature. So, why might a client be using the 'Manual Sales Tax' option?
One of the most common reasons is that they are using a 3rd-party product that works with QuickBooks Online and that product interacts with the 'sales tax features'. The 3PP might compute the sales tax and post it into QuickBooks to a record using a 'manual rate' and a 'manual sales tax vendor'. Or the 3PP might post the itemization into QuickBooks as a transaction and then have QuickBooks compute the sales tax, but the 3PP Developer encountered problems with getting the transaction details back (including sales tax) when the automated sales tax feature did the computations, so manual sales tax was selected. These were some of the issues that 3rd-party developers and QBO Users encountered when the 'Fully-automated Sales Tax Feature' was first implemented.
Soon we will have a new 'Hybrid Sales Tax Experience' that makes use of some of the 'automated feature set' (location matching and sales tax agencies). Will 3rd Party Developers be ready for the change? Have these changes been studied by the Intuit Development team in terms of their impact upon existing 3rd Party Apps? I asked these questions during the 'In The Know Webinar', but got no reply (answer).
So, I will be reaching out to my contacts at Intuit with these questions over the next few weeks and will strive try to 'keep you in the know' right here at Insightful Accountant.
In the mean time, you should also be aware that before the end of December, ProAdvisors, Accountants and Bookkeepers will be able to opt-in to the new 'Hybrid Sales Tax Experience' so they can get an early 'hands-on' to help prepare themselves for the changes that will be impacting so many of their clients. Once again Insightful Accountant will strive to make you aware when that early-option becomes available to you.
1- 'Get organized and stay compliant with sales tax filing' in the 'What's New in QuickBooks Online: November 2019', The QuickBooks Blog.