AR Tax Codes window
Tax Codes are used to specify sales taxes for items when they are sold. Use the Sales Tax Codes window to create or edit Tax Codes that will automatically calculate taxes for each sale. You can attach Tax Codes to specific customers on the Credit/Collection tab in the AR Customers window.
You can use
Avalera AvaTax to automate sales tax collection.
Sales Tax Code
Enter a code of up to six characters to represent this Tax Code. This code will be visible in Lookups and on some reports.
Description
Enter a description up to 50 characters to describe and identify the Tax Code, usually the entity to whom the tax is owed. For example, Idaho Sales Tax.
Total %
This box shows the total tax percent entered in the detail grid for this Tax Code. This amount cannot exceed 100% or you will receive an error when you try to save the code.
Detail Grid
The grid at the bottom of the window contains the detail information about this Sales Tax Code.
Level #
This field indicates the detail information line. This is useful if you have multiple individual taxes that are collected.
Description
This is the description that reflects what this detail level represents; for example, Idaho State Sales Tax or Boise City Sales Tax. Use up to 50 characters.
Vendor
This field only appears if you have Sales integrated with Accounts Payable. Enter the vendor you want to post this tax to.
Account Number
This field only appears if Sales is not integrated to Accounts Payable. If Accounts Receivable is integrated to General Ledger, type the GL Liability account or use the Lookup to select the account you want to post to.
If Accounts Receivable is not integrated to General Ledger, you do not need to enter information in this field to save the code.
Tax Percent
Enter the tax percent that you want calculated for this detail line, as specified by the taxing agency. This can be any number between .01 and 100. Enter the number as a percentage. Fifty percent is typed 50, one-half percent is typed .50.
Keep in mind that the total of all the levels cannot exceed 100 percent.
Limit/Activation
Use the drop-down to select the floor or ceiling limits for this tax. For example, in some areas, there is a luxury tax that is applicable only on the amount over $2,500 of an individual sale. In other areas, there are taxes that only apply to the first $1,000 of a sale.
• Limit: Once the taxable amount reaches the amount indicated in the Taxable Limit box, the system will stop calculating sales tax for the sale.
• Activation: Until the sale amount reaches the amount in the Taxable Limit box, the system will not start calculating sales tax for the sale.
Taxable Limit
Enter the dollar amount for the limit or activation.
If you selected Limit in the Limit/Activation column and the tax is not collected beyond a certain sale amount, enter the maximum dollar amount of the sale in this field.
If you selected Activation in the Limit/Activation column and the tax is not activated until the sale amount reaches a certain level, enter the minimum dollar amount of the sale before tax is calculated.
Related Topics
Published date: 11/22/2021