Sales tax settings

Sales tax has its own page in Settings. It holds two tools that work together:

• Automatic (Stripe) or Automatic (Washington DOR) — the selected provider looks up the sales tax rate for each property's address. Washington DOR is available to eligible Washington businesses without Stripe; optional Stripe fallback requires a verified connection and registrations.

• Your rates — manual rates your business defines, each with an agency, an optional jurisdiction, and a percentage. A rate can apply automatically to every taxable item or only selected pricebook items, and everywhere, only to properties in one state or province, or only to properties in one city.

You can use both at the same time. When both are on, a manual rate that applies automatically to a line item takes priority; the selected automatic provider calculates the rate for taxable items none of your manual rates cover. Your manual rates are also the options offered when you override the tax on a specific quote or invoice.

Where to find it: Settings → Quotes & Invoices → Sales Tax. Access requires the invoicing feature to be turned on and permission to set up invoicing integrations.

Choose automatic sales tax or manual rates only

1. Open Settings → Quotes & Invoices → Sales Tax.

2. Select Automatic (Stripe), Automatic (Washington DOR), or Manual rates.

3. For Washington DOR, optionally enable Stripe fallback after connecting and verifying Stripe and adding applicable registrations.

4. Select Save.

Your manual rates remain available with every method. Stripe mode and DOR's optional Stripe fallback require a verified Stripe connection under Settings → Invoicing → Payments. Tax registrations appear when a saved method uses Stripe and the account is connected. A disconnected account keeps its saved method so an administrator can reconnect it or choose another method.

See Use Washington DOR for address requirements, coverage, and optional fallback behavior.

Choose when sales tax is reported

Under Sales tax reporting basis, select:

• Cash basis — when payments are received: tax appears on the date of each successful payment, proportional to the amount paid. A half-paid invoice reports half its tax; the rest is reported when collected.

• Accrual basis — when invoices are open: the full tax appears using the invoice date once the invoice is open, even if it has not been paid. Draft and void invoices are excluded.

Select Save. The Tax Remittance Report uses this selection for every date range, including earlier periods. Refunds and payment reversals follow the selected basis. This setting is separate from accounting integrations and does not change posted journals or invoice taxes. Until you select a sales-tax basis, the report continues using your business's accounting basis (accrual if none is selected).

To keep the currently selected basis independent of future accounting-method changes, select that option again and click Save. Changing only the tax calculation method does not change how your reporting basis is determined.

Choose the reporting basis required by your tax authority. For example, Texas describes both cash and accrual reporting, while California generally requires accrual reporting.

Manage manual rates

Under Your rates:

1. Select Add rate.

2. Enter the required agency and Rate (%). Add a jurisdiction name when it helps identify the rate. Essential preserves and displays any additional decimal places in the configured percentage instead of rounding the rate.

3. Turn Apply automatically on if the rate should be added to taxable items on new quotes, invoices, and subscriptions. The next two choices only appear while it is on.

4. Under Where this rate applies, choose Everywhere, One state and pick the state to limit automatic application to properties there, or One city, then pick the state and type the city so it only applies to properties in that city. City names match regardless of capitalization. For example, a business that charges an extra 2% in Philadelphia adds a second rate limited to Philadelphia, Pennsylvania alongside its statewide rate; both apply to a Philadelphia property, and only the statewide rate applies elsewhere in Pennsylvania.

5. Choose All taxable items or Specific pricebook items. For specific items, search by item name or code and select at least one item.

6. Select Save.

Item, state, and city scopes affect automatic application only. You can still explicitly choose any configured manual rate for a taxable line in Adjust Sales Tax Rate on a quote or invoice. Custom items and generated lines without a pricebook item only receive rates configured for all taxable items. On an invoice with a different service address (see Create an invoice), scopes match that address rather than the property's.

Use the edit icon to change a rate. Editing the reusable rate affects new uses; saved documents keep their saved tax amounts. Use the delete icon to remove an unused rate. A rate already used by a quote, invoice, or subscription cannot be deleted. To retire it, edit the rate and turn off Apply automatically.

Related guides

• Connect Stripe for payments and automatic sales tax

• Set up and apply sales tax on a quote

• Run the Tax Remittance Report

Show a tax name and registration number

Edit a rate under Your rates and fill in Tax Name and Tax # under Quote and invoice display. Select Save. For example, a Tax Name of HST, Tax # of 123455, and saved rate of 13% prints HST #: 123455 (13%) in the tax summary on both quotes and invoices. Each manual rate can have its own name and number. Either field may be left blank.

These display settings apply when documents using that manual rate are rendered again; saved tax percentages and amounts do not change. Previously downloaded PDFs and signed quote PDFs keep their original content. Clearing both fields restores the standard label. Built-in templates support these fields automatically. Customized templates can add Tax Name and Tax # from the template editor’s Taxes (loop) variables.