This is a problem that users sometimes get when trying to create an invoice in QuickBooks. After attempting to save the invoice the message appears: “You must assign a Sales Tax Code to this line item…”. Unfortunately QuickBooks won’t allow you to save the invoice until you do so. Furthermore, sales tax isn’t even enabled for this QuickBooks file! There isn’t a way to assign a Sales Tax Code, making it impossible to complete the task. Here’s how you can get around this!
As you can see sales tax is turned off
But if you create an invoice with ANY detail item, you are unable to save it
It doesn’t make sense! There is no way to add any sales tax related items or codes, because sales tax is turned off!
Fortunately, the resolution to this is simple. The preference is essentially just stuck as “on”, and you have to “cycle” it to get rid of the error.
To do this, turn the sales tax preference on. Set the two “item code” preferences. Create a sales tax item with a 0.0% tax rate (any rate will do). Click OK to save preferences.
You will be asked if you want to make all existing customers and inventory/non-inventory parts taxable, uncheck those boxes (it isn’t necessary).
Next, go back to preferences, turn sales tax off and finally click OK again to save them.
Problem solved! You can now save your invoice without a sales tax code!