QuickBooks Online now supports Automated Sales Tax (AST), which allows tax to be calculated automatically based on location. Use this functionality with your website when specific settings are enabled. If this setting is not enabled in Association Settings, Novi will continue to charge your default tax rate for any taxable items, regardless of customer location.
Prerequisites
To use Automated Sales Tax with Novi:
Automated Sales Tax must be turned on in QuickBooks Online.
If the new QuickBooks Tax Center is not enabled, the option in Novi will not appear.Enable Automated Sales Tax in Novi > Association Settings.
This setting only appears if your QuickBooks Tax Center is active.
How Automated Sales Tax Works
AST determines the correct tax rate based on the billable party associated with the transaction at checkout.
Tax Lookup Logic
When calculating tax, the system searches for an address in the following order:
Billable party shipping address
Billable party billing address
Billable party’s parent record shipping address
Billable party’s parent record billing address
Address fields entered during checkout (shown only if no address is available)
Special Case: Washington State Events
For events located in Washington State, tax must be determined based on the event location, regardless of the billable party’s address. This is due to state tax law requirements.
Special Case: Subscription Renewals and Membership Renewals
We will always look to the member's address to find the tax rate in this case. if they don't have shipping nor billing addresses, QuickBooks will default to using the association's address.
Estimated Tax Display at Checkout
When Automated Sales Tax is enabled, the checkout screen will display Estimated Tax. This estimated amount is based on your site’s default tax rate - not the final QuickBooks-calculated rate.
We cannot know the true tax amount until the transaction is submitted to QuickBooks. Once checkout is complete and the transaction has been sent to QuickBooks, the accurate tax amount will appear on the confirmation.
Setting Up Tax Rates in QuickBooks
In QuickBooks Online, you must configure tax rates for all state tax authorities from which you collect tax.
QuickBooks will only return the Automated Sales Tax rates to Novi in states where tax agencies are set up.
If a state tax agency is not set up in QBO and a user checks out with an address in that location, you can choose whether they will be charged no tax, or whether Novi will charge the default tax rate defined under: Novi Admin sidebar → Accounting → Tax Rates.
If you would NOT like those in this scenario to be charged tax, navigate to Association Settings → Accounting & QuickBooks → Sales Tax section → uncheck the box labeled "Apply default tax rate to addresses outside defined tax agencies."
Important Note
Automated Sales Tax cannot be used together with the setting:
“Do not charge tax for out-of-state transactions”
These two settings conflict and will produce inconsistent tax results.