Avalara brings sales tax, use tax, and job-level exemptions to construction on QuickBooks Online

A contractor running three jobs in three states has three different tax pictures to manage, and QuickBooks Online only handles part of it. It calculates sales tax on what a customer owes, but it has no way to catch use tax on what a vendor undercharged and no way to tell an exempt project apart from a fully taxable build for the same customer. Those two gaps have meant spreadsheets, manual checks, and real audit exposure for contractors running on QBO.

Avalara for Construction on QuickBooks Online closes these gaps, directly inside the QuickBooks account a contractor already uses, without asking anyone to learn a new system.

• QuickBooks Online has no native way to calculate use tax on vendor bills or expenses, and no way to tie an exemption certificate to a specific job rather than a customer record.

• Avalara for Construction adds sales tax calculation on invoices, estimates, and quotes; automated use tax accrual on vendor bills and expenses; and project-level exemption certificate management, all tied to the QBO project a transaction is linked to.

• The integration is available now for QBO Plus, QBO Advanced, and QBO IES (Intuit Enterprise Suite) subscribers.

Construction businesses running on QuickBooks Online today have zero native tax compliance capability in two places.

1. Consumer use tax on accounts payable transactions: When a vendor doesn’t charge the correct tax for a job site location, QuickBooks has no mechanism to catch it. That gap shows up later, either as an audit finding or as hours spent each month manually reviewing vendor bills.

2. Project-level exemption certificates: QuickBooks offers a single checkbox to mark a customer tax-exempt, with no native functionality to track which job that exemption applies to. A contractor working an exempt job and a taxable job for the same customer has no way to apply the right treatment to each one inside QuickBooks alone.

Accounts receivable (sales tax): Avalara AvaTax calculates sales tax on invoices, estimates, and quotes.

Accounts payable (consumer use tax): Avalara AvaTax for Accounts Payable calculates use tax owed on vendor bills and expenses, checking sales tax a vendor charged against job-site jurisdiction requirements.

Project-level exemption certificate management: Each QuickBooks Project is linked behind the scenes to its own exemption record in Avalara Exemption Certificate Management (ECM), so a certificate can be tied to a specific job rather than the customer record.

Say a Dallas-based contractor has a kitchen remodel underway in Georgia. With Avalara for Construction, they can:

1. Link transactions to the project: The contractor creates the customer invoice or enters the vendor bill in QuickBooks and links it to the Georgia job’s QBO project.

2. Calculate sales tax: AvaTax applies the correct sales tax based on the job-site jurisdiction.

3. Map vendor bills to the job-site address: For materials like cabinets shipped from the Dallas supplier to the Georgia site, AvaTax for Accounts Payable checks what the vendor charged against what Georgia requires.

4. Accrue use tax without a manual journal entry: If the vendor undercharged or charged no tax, Avalara calculates the Georgia use tax owed and creates a journal entry in QuickBooks automatically.

5. Apply exemptions to the job, not the customer: If the project has a valid exemption certificate on file, Avalara applies it to that project specifically, so the same customer’s taxable projects are not affected.

6. Manage everything in one place: Calculated sales tax and accrued use tax both flow into Avalara Returns, where filing and remittance happen, either by the contractor or by Avalara for customers with a Managed Returns subscription.

AvaTax applies tax content, tracking rates, and rule changes across more than 12,000 U.S. tax jurisdictions. That’s the content layer behind every rate AvaTax applies to a job.

This release is built for subcontractors, specialty trade contractors (HVAC, plumbing, electrical), remodelers, and similar trades running their financials on QuickBooks Online — businesses often with a lean back office that can’t absorb a full-time tax hire. It’s scoped to ease two specific, recurring pain points, not every construction tax scenario at once:

Fewer manual reconciliations: Use tax on vendor bills and expenses no longer depends on someone remembering to check every purchase.

Accurate exemptions at the job level: A contractor working both exempt and taxable jobs for the same customer gets the right treatment on each invoice/job, without manually toggling a certificate between invoices.

Avalara for Construction runs on our core tax platform: AvaTax calculates sales tax on invoices, estimates, and quotes, and AvaTax for Accounts Payable does the same for vendor bills and expenses. Adding ECM Pro or Premium unlocks the Job field, so exemption certificates can be tied to specific projects. Avalara Returns handles filing and remitting returns, to complete the end-to-end compliance cycle.

Ready to see how this works for your construction business? Talk to an Avalara rep for a walkthrough.