WARNING! Serious Issue with change in Square sales tax reporting

All of a sudden, in the third week of October 2024, Square changed its method of reporting the sales tax received on the QBO sales receipts.

THIS CAN HAVE A HUGE IMPACT ON UNDERREPORTING SALES TAX AND GENERATE MAJOR TAX PENALTIES!

Instead of marking the items Taxable on the sales receipt and allowing QBO to calculate the tax, now the app lists all the items as NonTaxable and puts the sales tax received as a separate inline item. That's fine if Square is paying the tax for us but I haven't heard that to be the case.

This bypasses QBO's sales tax system and these sales will no longer show up on the Sales Tax Liability report! Very serious issue. I've contacted Intuit months ago and they "made a ticket" but the issue isn't fixed.

Official comment

Johnny Chiang

March 27, 2025 10:39

Hi Lynn, Sorry to hear about the issues that you are facing. I've reached out internally to the team that manages the Square integration with QuickBooks regarding your post, and I've been informed that the engineering team are aware of this issue and are working on a fix. If you have raised a ticket then your email should be flagged to be notified once it has been resolved.

WARNING! Serious Issue with change in Square sales tax reporting

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