Sales tax is a setting, not a guess. You choose who works it out, and every copy of an invoice — the PDF, the client's page, Stripe, QuickBooks, Xero — carries the same tax to the cent.
Who works out sales tax?#
System → Finance settings → Sales tax → Who works out sales tax?
- AspirePro (the default) — you set a tax rate on each invoice, and it applies to the lines marked taxable.
- QuickBooks — offered when QuickBooks is connected and has US sales tax switched on. QuickBooks works out the tax from your customer's and products' tax settings there.
- Xero — offered when Xero is connected and you've chosen the Xero tax rate (used when Xero works out tax) under Invoice settings for Xero on the Xero page.
The choice applies to new invoices only. Each invoice remembers who worked out its tax, so changing the setting never re-taxes paper already out. If QuickBooks or Xero stops being connected while it works out tax, what happens depends on how:
- Its login expires — the setting is kept. New invoices are still its to tax, and an invoice waiting for its tax can't go out until it's reconnected: Send stops and says why, a draft sent later stays a draft, and a recurring invoice that sends automatically is made but not sent — you're told each time. Nothing goes to a client without its tax. The card says so, and the people who can change Finance settings are told once. Once it's reconnected, send the waiting invoices; everything else carries on by itself. To send without waiting, choose AspirePro on the card (new invoices), and on each invoice already made choose Work out the tax here instead.
- You disconnect it — the setting goes back to AspirePro at once, and the card says why and when. Reconnecting doesn't switch it back by itself: choose it again on the card when you want it.
Recurring invoices set up while QuickBooks or Xero worked out the tax have no tax rate of their own. If AspirePro works out the tax from now on, give each one its rate.
QuickBooks can't work out tax while Stripe's own QuickBooks connector puts Stripe invoices into QuickBooks: QuickBooks only sees those invoices after they've gone out. Choose one or the other.
When AspirePro works it out#
The tax goes to QuickBooks or Xero as its own line, for the exact amount, recorded in the liability account you choose on that integration's page (Sales tax account on the QuickBooks page's Invoices tab; Sales tax account (needed when an invoice has tax) on the Xero page) — never in revenue. Pick a liability account such as "Sales tax payable", not an income account. Every other line goes as not taxable, so the accounting system can't add a second tax. Invoices with tax can't be copied to QuickBooks or Xero until that account is chosen. If you file sales tax from QuickBooks, let QuickBooks work out the tax instead, so it shows in QuickBooks' sales tax reports.
When QuickBooks or Xero works it out#
- Lines go across marked taxable or not taxable, and the tax the accounting system comes back with is written onto the invoice.
- The invoice can't be emailed, sent through Stripe or paid online until that tax is back for its current lines. If the system can't be reached, the send stops and says so; nothing goes out without its tax.
- Edit the lines of a sent invoice and its tax is worked out again before it's sent again. Until then it keeps the last tax, and it's never marked paid in full.
- If no tax came back even though some lines are taxable, the invoice says so. That's often right (an out-of-state client), but worth a look at the client's tax settings there.
- Work out the tax here instead on any draft switches that one invoice to AspirePro — for when the accounting system is gone or can't do it.
Tax-exempt clients#
On a company's Finance tab, mark the client tax exempt and say why (a reseller certificate, a nonprofit). Their invoices and quotes then carry no tax, however they're made — typed, duplicated or converted from a quote — and QuickBooks and Xero get every line as not taxable. The PDF shows Tax exempt.
The exemption is recorded on each invoice when it's made. Becoming exempt takes tax off the client's drafts; invoices already sent keep the tax they went out with.
Accepted quotes#
An invoice made from an accepted quote keeps the tax the client accepted. It isn't worked out again by QuickBooks or Xero into a different total.
If QuickBooks or Xero ever shows a different total from AspirePro, it's listed on Finance → Sync and clears itself once a later update matches.