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April 20, 2026
Question

Is there a setting in QBO that prevents the AST engine from adding a duplicate "Tax on Shipping" line to PayPal-imported transactions?I am using QuickBooks Online.

  • April 20, 2026
  • 1 reply
  • 11 views
I am the Treasurer of a Tennessee nonprofit organization using QuickBooks Online with the PayPal Connector by QuickBooks app. I am writing to report a problem with how the PayPal Connector handles sales tax on shipping charges for Tennessee transactions, and to request guidance on a correction path that does not currently appear to exist. THE PROBLEM Tennessee law requires sales tax on shipping charges. PayPal calculates and collects the correct Tennessee sales tax on shipping at the time of each transaction. When those transactions are imported into QBO via the PayPal Connector, QBO's Automated Sales Tax (AST) engine adds an additional "Tax on Shipping" split line on top of the tax PayPal already calculated. The result is that sales tax on shipping is recorded twice. This creates two problems: 1. The Sales Tax Liability report overstates the amount due to the Tennessee Department of Revenue. 2. The Sales Tax Payable account balance on the balance sheet is overstated by the same amount. WHAT I HAVE TRIED I have investigated the following correction paths and found each to be unavailable: 1. Editing the transaction in the Banking feed For Review tab — the sales tax fields are not editable in that view. 2. Editing the transaction after acceptance — once confirmed, the tax lines are locked and cannot be edited in either the register or the full transaction form. 3. Disabling automatic sales tax on shipping in QBO settings — I cannot locate a specific setting that controls this for PayPal-imported transactions without affecting other transaction types. 4. Mapping shipping to a non-taxable item in the PayPal Connector — the Connector maps shipping to a "Shipping and Handling" service item, but there is no taxability checkbox available in the Connector settings, and the item itself does not expose a tax control that resolves the problem. CURRENT WORKAROUND I am currently correcting each affected period using the Sales Tax Center Adjust function, combined with a manual journal entry to reconcile the balance sheet. While functional, this is a manual correction required every month and does not address the root cause. MY QUESTIONS 1. Is there a setting in QBO or the PayPal Connector that prevents the AST engine from adding a duplicate "Tax on Shipping" line to PayPal-imported transactions? 2. If not, is this a known issue, and is a fix planned? 3. Is there a supported way to edit or remove the duplicate line from an already-accepted transaction? I am using QuickBooks Online with the PayPal Connector by QuickBooks app. Please advise. Thank you.

    1 reply

    Tori B
    QuickBooks Team
    April 20, 2026

    Thanks for the detailed explanation, @Phil-Coop.

     

    It sounds incredibly frustrating to have to manually correct your sales tax every month, especially when you've already done the hard work of identifying exactly why those duplicate lines are appearing. I can see how much effort you've put into troubleshooting this for your nonprofit, and I want to be straightforward with you about how the system is currently handling these Tennessee transactions.

     

    Because the Automated Sales Tax engine in QuickBooks Online is designed to ensure compliance by recalculating taxes on imported data, it often adds that second tax line to shipping charges from the PayPal Connector. Right now, there isn't a specific setting within QuickBooks Online or the PayPal Connector app to disable this automated recalculation for specific imported lines. Additionally, once these transactions are accepted, the tax lines become locked to maintain the integrity of the automated calculation, which is why you aren't able to edit them directly.

     

    Since your current method of using sales tax adjustments and journal entries is the most accurate way to keep your Sales Tax Liability report and balance sheet in balance, I recommend continuing with that process for now. While I know a manual workaround isn't the end-to-end solution you're looking for, it's the best way to ensure your filings with the Tennessee Department of Revenue remain correct. In the meantime, we're passing along your feedback to our developers.

     

    If there is anything else I can assist you with, please don't hesitate to let me know.