What Is Powering QuickBooks Online Sales Tax?
It is my understanding that Exactor is providing the underlying technology that is running this new sales tax feature in QuickBooks Online. This is good, Intuit did not go out and try to build this complicated technology on their own. Instead, they have acquired an existing, mature technology. This gives me much more confidence in this new feature than I would have had if Intuit was building it from scratch. On their own, it would have taken years to develop something that was the equivalent.
I’m not familiar with Exactor in detail, so I can’t really say too much about them. The company was founded in 2006, so it isn’t a newcomer. Their sales and use tax products integrate with a very impressive list of products and companies, such as QuickBooks Online, QuickBooks desktop, NetSuite, several flavors of Microsoft Dynamics, multiple Sage Intacct accounting products, and multiple payments/ecommerce providers. See this list of current integrations.
Converting from the Old Sales Tax Method
Everything I’ve shown you so far has been for a new QuickBooks Online subscription, or for an existing one where you have never enabled sales tax before this time. If you have ever turned on sales tax prior to this update, you will not be able to use the new system at this time. Here’s what you might see if you select Taxes. This is the old format for the sales tax center. If you see this, you have been using the older sales tax method, and you can’t change to the new system (yet).
If you have enabled sales tax before this new feature was released, the question will be, How can I change to the new system? Unfortunately, it is going to be tricky to convert from the old system to the new system. In the old system, when you set up a sales tax agency, you could enter any name that you wanted. I could, for example, create an agency named “CA BOE.” In the new system, the agency names are set up for you, so they are standardized across all users. For California it would be “California State Board of Equalization.” How can QuickBooks Online know that “CA BOE” is that agency? It’s complicated. And I suspect that there are also some internal differences in how tax data is stored.
Intuit’s plan is to start off by providing the new sales tax feature to companies that have not yet implemented sales tax. No migration necessary there. Early in 2018 they should be able to start migrating customers from the old system to the new system. It will take time. I suspect they’ll start with the easier cases first. This won’t be something that can be done just by clicking a switch in your file.
So What Do I Think?
I’ve only been playing with this for a few days, so it is hard for me to comment on accuracy and reliability. I have to say that it looks very good — I’ve not been able to catch any errors. There might be a few minor user interface glitches that will be resolved soon, but nothing that causes any problems.
This feature has been field tested by a large number of users for many months now, which should give new users a lot of confidence.
As I mentioned above, I’m very happy that Intuit has acquired this technology, rather than trying to develop it from scratch. It is a very complex technology.
The new QuickBooks Online Sales Tax feature is a major improvement, and it will save a huge amount of work for any small business that has to collect sales tax.