QB Issue Resolution:

Based on your screenshot above, it seems you’re using QuickBooks Online Full Service Payroll (QBFSP). The sales tax fee is based on the primary address registered on your account. The Employee Surcharge is the billing price for your employee while the Multistate Support Surcharge is a charge depending on the states you have.

It could be CA is the state selected for your primary address, which is why you’re being charged with CA sales tax. To confirm this, it requires pulling up your account. I’d suggest contacting our QBFSP Customer Support Team. They can securely access your account and verify it. Then, they will assist you in changing the correct state as the primary location. Also, they can review to see if your company’s payroll service can be exempted from sales tax .

Here’s how:

  1. Sign in to your account.
  2. Go to the Help menu at the top right.
  3. Click Contact Us.
  4. Input your concern.
  5. Select Let’s talk.
  6. Choose Get a callback or Start messaging.
  7. Enter your contact info.
  8. Select Confirm my call or Send message.

I’m adding this hub article to learn more about setting up and processing payroll, managing employees, paying taxes, and filing your tax forms: QBFSP Hub.

Resolution for Issue 'Why payroll processing for AZ employee charged CA Sales Tax?' available: Yes (Solved).
Source: Intuit Community forum.

Why payroll processing for AZ employee charged CA Sales Tax?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

Support for CA Sales Tax
Quickbooks Repair Pro will resolve it efficiently and affordably. Guaranteed resolution of your issue, or you pay nothing!

Error Recovery for CA Sales Tax [Canada]
E-Tech is the #1 Quickbooks data migration and Conversion service provider.

Get 50% off Quickbooks Online

Click Here for 50% off!

Additional Support Options: