What Is a Sales Tax Group and How Do I Create One?

A Sales Tax Group is a type of Item that is maintained on the Item List.  It’s used to combine multiple Sales Tax Items (which are themselves another type of Item) into a single sales tax charge on a customer invoice. 

See our article on all of the Item types supported by QuickBooks for more information.

Since QuickBooks only supports 1 sales tax code (item or group) on an invoice, a Sales Tax Group is a way to reduce the number of codes needed to invoice a customer.  In turn, that reduces the chance of data entry error while at the same time calculating all required sales taxes.

Before you can set up a Sales Tax Group, make sure that you have:

  1. Set the preference to collect and track sales taxes
  2. Already created all of the individual Sales Tax Items that will be combined into a Sales Tax Group

With those steps completed, you can create a Sales Tax Group by completing these steps:

  1. Open the Item List from the Lists->Item List menu selection
  2. Click the Item button in the lower left corner of the Item List window
  3. Select New from the menu or press the keyboard shortcut Ctrl + N
  4. When the New Item window appears, choose Sales Tax Group from the pull down menu
  5. Enter the Group Name and Description
  6. Add all the single Sales Tax Items that make up the Sales Tax Group
  7. As you add the Sales Tax Items, QuickBooks will update the Group Rate, the total tax rate for this Sales Tax Group
  8. Click Ok to save your work

Note:

You may observe a minor display bug in early releases of QuickBooks 2009.  Here’s a screenshot from QuickBooks 2009 Premier Accountant Edition R3P.  Instead of displaying the Sales Tax Group as a percentage similar to a Sales Tax Item, the Sales Tax Group is displayed as a rounded decimal.  In this example, the Sales Tax Group is shown as 0.08 even though it is a combination of East Bayshore and San Domingo, for a total of 0.078, or 7.8%.  However, although the Sales Tax Group is displayed incorrectly, QuickBooks calculates the tax total for the Sales Tax Group correctly.

Here’s a similar display from QuickBooks Premier Accountant 2008 R6P, where the Sales Tax Group is shown as a percentage accurate to 2 decimal places:

This display bug was fixed in later releases of QuickBooks 2009 and doesn’t affect QuickBooks 2010.  If you’re running an old release of QuickBooks 2009, update your QuickBooks to the latest release.

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