Sales Tax Codes window

SalesCS > Sales > Options menu > Sales Tax Codes window

Use Sales Tax Codes to set up a tax calculation formula to quickly and accurately calculate the sales tax on each sale. If you want to treat a particular sale differently with respect to sales tax, you can override the code (depending on the setup of the sales entry layout) to add the correct tax.

Sales Tax Codes keep track of taxable sales, non-taxable sales, and tax. If you collect tax for more than one taxing authority, such as state and municipal sales tax, you can group multiple Sales Tax Codes so that the correct sales tax is added to the sale.

Depending on the modules installed and your integration settings, sales tax collected in Point of Sale may post to either a GL Liability account or to an AP Vendor.

NOTE: If you use 3dCart e-commerce, you will see a WEBTAX Tax Code. This Code is only for 3dCart orders; you cannot use this Tax Code for manual transactions.
If you use AvaTax for sales tax calculation, you will see an AVATAX Tax Code. This Code is used for automated tax calculation and cannot be edited.

Sales Tax Code

Enter a Sales Tax Code of up to six characters. This code will appear in Lookups and on some reports.

Total %

The total percentage of sales tax to be calculated is automatically displayed here. Use this to verify that the detail lines you set up add up to the correct total.

Description

Enter a description for this Sales Tax Code. The description can be up to 50 characters. This can be helpful if you need many Sales Tax Codes to accommodate complex taxing systems. This description will also appear in Lookups and on some reports.

Detail Grid

Use the fields in the detail grid to define the various components of the Sales Tax Code. Each tax in the grid will be collected for each sale based on the details you specify.

Level #

This is assigned by the system and is the number of this detail element of this Sales Tax Code.

Description

Enter a description for this detail line of the Sales Tax Code. This appears as a detail item on sales tax reports. We recommend you make this very descriptive to help you identify each tax from others, especially in locations with many individual taxing entities.

Vendor / Account Number

If the Sales module is integrated to Accounts Payable, this column is labeled Vendor. If Sales is not integrated to Accounts Payable, the column is labeled Account Number.

• If Sales is integrated to Accounts Payable, but not to General Ledger, enter the Vendor to which you want the sales tax to post.

• If Sales is not integrated to Accounts Payable, but is integrated to General Ledger, or if the General Ledger integration is set to Report Only, enter the GL Liability account to which you want the tax to post.

• If Sales is not integrated to Accounts Payable or General Ledger, you can leave this column empty.

Tax Percent

Enter the tax percent specified by the taxing agency. This is the percent for the specific detail line; the tax percent amounts from each detail line will be collected according to your specifications and will total the complete sales tax the customer will pay.

Limit/Activation

Use this option to specify if the tax on this detail line should only be collected up to a certain limit, or if it should only be collected after the sale reaches a certain activation amount.

• Limit: If the specific sales tax should not be collected beyond a certain price, select the Limit option, and enter the maximum unit price on which the tax should be assessed in the Taxable Limit field. This limit is typically imposed on the entire invoice, but be sure to check the regulations for your taxing entity. For example, the limit in your area is $1,500. This means that if a customer purchases three items and one costs $500, another $2000, and the last $500, sales tax would only be calculated on the first item and then $1000 of the second item. Any remaining items on the invoice would not incur sales tax because the limit was reached.

• Activation: If you don’t want the specific sales tax to be activated until the total sale reaches a certain dollar limit, select the Activation option, and enter the minimum sale amount on which sales tax should be assessed in the Taxable Limit field. For example, if the activation level is set at $2,500, and a customer purchases an item that costs $4,000, then sales tax will only be assessed on the amount that is in excess of the $2,500 activation level ($1,500). As with the Limit option, be sure to check the regulations for your taxing entity.

Taxable Limit

If you selected Limit in the Limit/Activation field, enter the amount of the limit over which this tax is not collected. If you selected Activation in the Limit/Activation field, enter the amount at which this tax is to be activated.