What is the first step to enable sales tax in QBO?

Question

BlackTom AI · Accepted Answer

Let's break down what each option implies about enabling sales tax in QuickBooks Online (QBO).
Option 1: 'Enter tax rates manually for each transaction.' This approach would be tedious and error-prone, as it requires you to specify rates for every single transaction rather than configuring a centralized setup. It ignores the systemic setup step that QBO expects users to perform before processing items, and it’s not aligned with the standard workflow.
Option 2: 'Go to the Taxes section and set up sales tax.' This choice matches the typical, recommended procedure: you navigate to the Taxes area and complete the setup to enable sales tax handling, rates, and rules for your region. It reflects the first step in enabling tax functionality rather than bypassing configuration.
Option 3: 'Create group tax rates for GST and PST.' While creating group or combined tax rates might be something you do later in certain regional setups, it presumes you’ve already entered and activated the tax framework. It’s a more specific customization step that usually follows the initial enabling of sales tax.
Option 4: 'Add custom tax agencies for your business.' Adding tax agencies is part of defining tax entities and may come after the broader setup, but it presupposes that the tax system is already turned on and configured. It’s not the initial step to enable sales tax itself.
In summary, the sequence intended by the system is to first enable and configure taxes in the Taxes section, rather than starting with manual entries, special rate groupings, or agency additions. Therefore Option 2 accurately reflects the first step to enable sales tax in QBO.

QBO25E1 - QuickBooks Online Module 12 Quiz

What is the first step to enable sales tax in QBO?

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