You can turn off automated sales tax in QuickBooks Online by going to Sales Tax, then Overview, then selecting Sales Tax Settings and choosing “Turn off sales tax.” That disables the entire feature. But if you only need to remove tax from certain customers or individual transactions, QuickBooks has separate options for those situations too.
Turn Off Automated Sales Tax Entirely
If you no longer charge sales tax or you enabled the feature by mistake, you can shut it off completely. Here’s how:
- Go to Sales Tax, then Overview.
- Select Sales Tax Settings.
- Select Turn off sales tax.
- Confirm by selecting Turn off.
This disables the automated tax calculation going forward, but it does not retroactively remove sales tax from transactions you’ve already created. If past invoices or receipts show tax that shouldn’t be there, you’ll need to open each one and edit it manually.
A few things change once you flip the switch. Future recurring invoices will stop including sales tax. All your tax agencies become inactive, though QuickBooks saves your registration info in case you need it later. Sales tax liability reports for past periods remain available, so you won’t lose historical data. Any custom tax rates you created stay on file but can’t be added to new transactions.
Remove Tax From a Single Transaction
Sometimes you don’t want to turn off the whole system. You just need one invoice or sales receipt to skip sales tax. QuickBooks lets you override the tax calculation on individual transactions without changing your global settings.
- Open the invoice, sales receipt, or other transaction.
- Select Override this amount in the sales tax section.
- Enter the correct rate or amount (use zero if no tax should apply).
- Choose a reason for the change, then select Confirm.
- Select Save.
You can review any override later by selecting “See the math” on the transaction, which shows the original calculated tax alongside your adjustment. This is useful when you need a paper trail for audits or when a customer’s exemption applies to only certain purchases.
Mark a Customer as Tax-Exempt
If you have customers who are consistently exempt from sales tax (nonprofits, government agencies, resellers with valid exemption certificates), the cleanest approach is to update their customer profile rather than overriding every transaction.
- Go to Customers (or Sales, then Customers, depending on your navigation layout).
- Select the customer you want to update.
- Click Edit on their profile.
- Go to the Tax Info tab.
- Uncheck the setting that marks the customer as taxable.
Once you do this, QuickBooks will stop calculating sales tax on any new transactions for that customer. You won’t have to remember to override the tax each time you create an invoice. Existing transactions for that customer aren’t affected, so go back and edit those if they need correcting.
Deactivate Specific Tax Rates
If you’ve moved out of a tax jurisdiction or no longer need a particular rate, you can deactivate it rather than turning off the entire sales tax system. One important caveat: deactivating a tax rate is permanent. You cannot reactivate it later. If you think you might need the rate again, leave it active.
- Go to Sales Tax, then Overview.
- In the Sales Tax Center, find the Related Tasks section and select Add/edit tax rates and agencies.
- Select the tax rate name you want to remove.
- Select Deactivate, then confirm.
QuickBooks doesn’t allow you to fully delete tax rates or tax agencies. If a tax agency name is outdated or wrong, you can rename it from the same Sales Tax Center by selecting “Rename” next to the agency name, making your changes, and saving.
Choosing the Right Approach
Your situation determines which method to use. If your business has stopped collecting sales tax altogether, perhaps because you closed a physical location or changed what you sell, turning off the automated feature is the right call. If you still collect tax from most customers but have a handful of exempt ones, update those customer profiles. And if you just need a one-time fix on a single invoice, the per-transaction override is the fastest path.
Keep in mind that turning off automated sales tax and then turning it back on later will require you to re-enter your tax agency details and set up rates again, since the feature deactivates all agencies when you disable it. If there’s any chance you’ll need sales tax again soon, using customer-level exemptions or transaction overrides will save you the setup work down the road.