Question

Sales Tax Liability report showing incorrect Non-Taxable Totals

Forum|Forum|11 months ago
July 16, 2025
1 reply
25 views

Summary of the issue:

I’ve rebuilt all sales transactions from July 1, 2024 through June 30, 2025 using Sales Receipts with proper taxable item codes and location-based automation enabled.
No sales tax amounts were overridden, and all applicable sales are marked as taxable.
Non-taxable transactions (wholesale and out-of-state) are properly flagged and separated.

Despite this, the Sales Tax Liability Report continues to misclassify several taxable sales as non-taxable. In some cases, the report displays zero values, even though the correct sales tax was calculated and included on the Sales Receipt.

I’ve confirmed the Automated Sales Tax module is active and configured properly, but there appears to be a disconnect between the underlying tax mapping and how the report is compiling the data.

QuickBooks Accountant Online

K

Kurt_M

QuickBooks Team

You'll want to ensure those products or services on the sales receipts are taxable for the system to accurately detect, Rose. Otherwise, it'll reflect as non-taxable in the Sales Tax Liability report. More details will be provided below to ensure your inquiry is addressed.

To begin, click the amount in the report to pull up the transactions. Then, manually review each of the sales receipts created. If it shows zero, select See the math and verify in the Products and Services section whether the item is taxable. If not, then you’ll want to modify it and refresh the report to see the changes. Here's how:

Review the sales receipts through the Sales Tax Liability report by clicking the amount.
Find a sales receipt transaction that shows zero tax.
Click See the math and then select Edit in the Product and services section.
Verify the sales tax category of the product and ensure they're taxable.
Click Done, and then select Save and continue button.
After making changes, click the Close button.

For visual reference, see the image below.

I also recommend checking this page to learn more about how the Sales Tax Liability report works in QBO: Understand the sales tax liability report in QuickBooks Online.

We encourage you to comment below if you have other questions about reports or need assistance performing specific tasks in QuickBooks. We'll make sure to be around and extend a helping hand.

RoseBallerasAuthor

Hi Kurt,

Thanks for the reply, but I need to clarify that I’ve already completed everything outlined in your response.

I’ve manually rebuilt every Sales Receipt from July 1, 2024 through June 30, 2025 with proper taxable item setup, location-based sales tax automation, and correct customer sales tax mapping. I’ve confirmed:

Every product/service used is marked as Taxable
No sales tax amounts were overridden
Non-taxable transactions (wholesale and out-of-state) are correctly flagged
The Automated Sales Tax module is enabled and configured correctly

Despite this, the Sales Tax Liability report continues to misclassify taxable sales as non-taxable, and in many cases shows $0 tax collected, even though the Sales Receipt clearly shows the tax was calculated and included. When I drill into the report, the transactions are listed—but without tax values, and in some cases, the Tax Name is missing entirely from the report line.

This is not a setup issue, and I’ve already reviewed every SR manually. The issue appears to be deeper—possibly a reporting sync problem or a breakdown between the transaction-level tax logic and the reporting engine. I’ve also worked with Support (Case #15140355764), but they were not able to escalate or resolve.

At this point, I’m requesting Tier 2 or Engineering escalation for a backend refresh or rebuild of the sales tax module. Is there a moderator or product team member who can assist with that request?

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