Intuit has published a path to migrate to their newly implemented 'automated sales tax' feature for US subscribers to QuickBooks Online. Prior to this only 'new' subscribers (from about mid-December 2017) had the automated Sales Tax feature available to them.
According to Intuit, "...starting February 2018, QuickBooks Online gives you the option to migrate to the new Automated Sales Tax experience. If you are currently using the Manual Sales Tax Center, you will be asked to make the switch and you will be walked through the setup process." Intuit goes on to say, "...currently, there is no option to revert to the manual sales tax once you've switched to the automated sales tax experience."
It appears that this migration path is being phased in, and not all QuickBooks Online users will have this option available initially. Intuit says, "...if your account has been enabled for automated sales tax and you select taxes from the left menu, you will be directed to a page explaining the benefits of the new Automated Sales Tax feature." The key word in that phrase is "enabled", the exact time line as to when specific QBO user accounts will be enabled was not contained in the materials available to Insightful Accountant.
According to Intuit, "... you will not lose any transactional data as a result of migration."
The new page explaining the benefits of the Automated Sales Tax feature is shown below. Remember you will only see this page if you click on Taxes from the left-hand menu bar and your account has been enabled for migration.
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Option 1 - If you select Continue to old tax center
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- You will be asked to confirm that you don’t want to make the change.
- You will also be asked for your reason then you’ll be redirected to your existing sales tax center.
Option 2 - If you select Make the switch, you will be walked through some questions and steps for moving your tax setup to the new experience.
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- Verify your address - QuickBooks will be basing tax calculations on this address so it's critical that it is correct. It it is correct, select Looks good, if it is not correct, click the pencil icon and correct your address.
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- Confirm your tax agency- on this screen, you will see the tax agency name you previously set up in your account and what it will be called going forward. If it's correct,select Looks good. If it's not, select the link I use a different tax agency and then correct your tax agency.
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- Select the appropriate filing frequency (monthly, quarterly or annually). Once you have made your selection, click Next.
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At this point, the set-up is complete. You should see a confirmation screen telling you that 'You're all set'. This screen, as shown below, will provide a breakdown of the general sales tax rate(s) based upon your Company location.
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This page also explains that your rates will change based on shipping and special tax rules. Select Go to taxes to access your new sales tax center. Refer to Sales Tax Center Navigation if you need more information.
I personally believe there is more to this process than just the steps above (within the Intuit KBA) which don't even address the areas of 'Sales tax categories' and the 'What you sell' fields that are associated with taxable items in your file. At least, those two fields (as shown in the illustration that follows) are critical to the proper configuration (and calculation) of taxable items for QBO users who started using the new automated system 'from scratch' (without prior sales tax in place).
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In addition, there are more details required in terms of Vendor taxability or tax-exempt status that the steps outlined above do not address.
We discuss both the additional 'item fields' and the 'vendor taxability' fields extensively in the PDF of our webinar presentation on the new Automated Sales Tax functionality. You will find those materials available via the 'archive' link in the companion articles shown below this article.
While existing transactions within your data will remain unaffected by migration, if a prior transaction involving sales tax is in any way edited, the results could be impacted by the automated sales tax feature which will re-calculate the sales tax amount of that particular transaction. Therefore care should always be taken when editing or altering any transaction prior to migration. Insightful Accountant recommends that you always write down the original sales tax amount so if it is changed inappropriately as a result of the edit, that you can use the override capability to change it back to the original amount.
Word of caution, as indicated previously, at present there is no option to revert to the 'old' manual sales tax feature once you've switched to the automated sales tax experience. While Intuit is reportedly working on product enhancements that may allow for flexibility between the automated and manual sales tax functionalities, there is no indication from Intuit as to when such capability will be available.
Intuit recommends that users selecting the automated sales tax feature make use of the override capability available on each transaction with sales tax if they wish to ignore the automated calculation.