Everyone, I hope you're well.
I'm the original creator of this post. My specific issue is related to unusual taxing for specific SKUs that can vary by state, city, and country. Below is the process I used to fix this and there's also a solution for high-volume folks.
"Fix" in QBO for Limited SKUs that are often re-used
The reason why your tax is off is because the SKU isn't matching with the tax QBO expects. QBO needs to know the exact tax amount for each SKU it is sent. If you're sending unique SKUs to QBO, this likely isn't the solution for you. Also consider that the SKU number/name and not the description is what QBO uses here. So you can create a SKU like "ABC Services" that's encompassing of all your labor charges but put the specific services in the description. That will allow QBO to assign the right tax to ABC Services while still being useful for you and the client.
- Create a unique SKU for each item and each client. For example, if you have client "ABC" and you sell them widgets, make a SKU called "ABC Widget." If you have another company called XYZ they'd have "XYZ Widget."
- Make an invoice for each client with all the SKUs. Pro-tip, start small as a proof of concept in case this doesn't work the way you want.
- Make sure you know what your taxes should be for each SKU. In Colorado, the site is here. Each state has their own page for this.
- Push the invoice to QBO. Yep, the tax is wrong. Go to every single SKU in your Product List and set the correct tax category.
- Consider either deleting all your old SKUs or putting a name like "zLegacy" in front so they can be easily sorted to the bottom of your Products list.
- Delete the invoice from your invoicing system and QBO.
- I'd consider making a new invoice with each SKU to double check. Pro-tip, if you can show your tax per-SKU on your invoice that can help you figure out if a particular SKU is off.
- I recommend a triple-check. Each time you add a new SKU remember that it's a per client change and that you need to make adjustments each time in QBO.
High Volume Companies or Variable SKUs
There is software that can effectively invoice clients the correct amount and sort of factors in the tax. Avalara is one such company that integrates well with QBO and (hopefully) your invoicing system. Effectively, you get a SKU that's for the exact tax you need for each invoice. I demo'ed it and it's good if you're volume is high enough. The downside would be if you're using QBO to accurately pay taxes too. You'll need to pull that info from Avalara instead so make sure your accountant is looking in the right place for taxes. I don't recall but I believe you just switch all your clients to tax exempt in QBO to make this solution work.
Wrap-Up
Once I understood the process I could see why QBO is struggling with this. It feels like it should work better but, unfortunately, these are our options. I hope this helps someone!
