Managing Customer Tax Exemptions When Using QuickBooks

If some of your customers are tax exempt, where you record that exemption matters. This article explains how customer exemptions sync from QuickBooks, why we recommend creating exemptions directly in Kintsugi instead, and how to fix exemptions that are not applying the way you expect.

How Exemptions Sync from QuickBooks

When a customer is marked as tax exempt in QuickBooks, Kintsugi reflects that status by creating an exemption on the customer's record in Kintsugi. While this keeps both systems aligned, QuickBooks does not capture the details a proper exemption needs:

• No start or end dates. QuickBooks does not let you set exemption validity dates. Kintsugi uses the date the exemption synced as the start date, and with no end date, the exemption stays active indefinitely unless you deactivate it.

• Blanket exemptions from missing address data. Exemptions are usually state specific. If the customer's address has no state, the synced exemption becomes a blanket exemption that applies to every state (or every country where the customer transacts). This often exempts far more than intended.

Important: QuickBooks sometimes marks new customers as tax exempt by default during customer creation. If invoices for a customer are unexpectedly showing zero tax, check whether the customer has an exemption in Kintsugi that you did not intend to create.

Our Recommendation: Create Exemptions in Kintsugi

Instead of marking customers as tax exempt in QuickBooks, leave the sales tax exempt checkbox unchecked in QuickBooks and create the exemption directly in Kintsugi. Exemptions created in Kintsugi include:

• Start and end dates, so the exemption applies only while it is valid

• State or jurisdiction, so the exemption applies only where it should

• Attached exemption certificates, so your documentation stays in one place

Kintsugi never modifies exemptions you create in the Kintsugi UI, so they remain exactly as you set them.

To create an exemption, go to the Exemptions tab in Kintsugi, or open the customer's profile and add the exemption there. For step-by-step instructions, see How to Import a Single Exemption Certificate and How to Bulk Upload Exemption Certificates.

Already Have Exemptions in QuickBooks?

If you connected QuickBooks with existing tax exempt customers, we recommend cleaning up during setup:

1. Review the exemptions that synced into Kintsugi. Look for exemptions with no end date or no state, since these apply more broadly than intended.

2. Remove the tax exempt marking in QuickBooks for those customers.

3. Recreate each exemption in Kintsugi with the correct state, start date, end date, and certificate.

Check Your Exemption Dates

An exemption only applies to an invoice if the invoice date falls within the exemption's validity window.

For example, if an invoice is dated August 27 and you create an exemption with a start date of August 28, that invoice will not be exempted because it falls outside the exemption window. Setting the start date to August 26 or earlier exempts the invoice automatically, with no further action needed.

If an invoice is showing tax for a customer you expected to be exempt, compare the invoice date against the exemption's start and end dates first.

Troubleshooting

• A customer is exempt but should be taxable: Search for the customer in Kintsugi's Customers section and check for exemptions on their record. Deactivate any exemption that should not be there, and uncheck the tax exempt marking in QuickBooks so it does not sync back.

• An invoice shows zero tax unexpectedly: Check for a blanket exemption on the customer (an exemption with no state or jurisdiction). Deactivate it and recreate a properly scoped exemption in Kintsugi if the customer genuinely qualifies.

• An exemption is not applying: Confirm the invoice date falls within the exemption's start and end dates, and that the exemption's state matches the transaction's state.

Need Help?

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