to select, the state or province to which the tax code applies. This state or province must already exist on the Manage States and Provinces screen. The unlabeled field to the right displays the descriptive name of this state or province.Use this screen to set up tax codes for automatic computation of sales or value-added (VAT) tax in various modules throughout the system. After you have set up tax codes on this screen, go to the Manage States and Provinces screen and enter the default tax code for each state and province.
Before using this screen, you must set up the following screens:
Use the fields in this block to initially set up a sales/VAT record.
Enter an identification code for this tax code.
Enter a descriptive name for this tax code. In most cases, this is the state or province, but it can also be another jurisdiction that has its own rate.
Use the fields and check boxes in this block to set up detailed information for this sales/VAT record.
Enter, or click to select, the state or province to which the tax code applies. This state or province must already exist on the Manage States and Provinces screen. The unlabeled field to the right displays the descriptive name of this state or province.
This field displays the country associated with this state/province. You can edit this field as needed. This country must already exist on the Manage Countries screen. The unlabeled field to the right displays the descriptive name of this country.
Select this check box if this tax code requires VAT or customs declarations.
This field displays the result of the added rates in the table window. This is the rate that will be based upon when this code is in use. For example, in some cases there are two or more jurisdictions that actually collect sales tax, but the rate is applied as only one rate.
This field displays the percent of the total composite tax rate that is recoverable. For example, if the composite tax rate is 7.50% and one fourth of this is recoverable, 25.00% displays in this field.
Enter the recovery percent override.
Use the check box and field in this group box to specify if this tax code is exempted from tax.
Select this check box if this tax code is exempt from tax.
When you select the Exempt check box, enter the tax exemption certificate number in this field.
Use this table window to enter the specifications for this tax code and to designate accounts and organizations for those taxes that are recoverable.
Enter, or click to select, the account to use for the tax payable for this tax code. Every sales tax code must have at least one account.
This field displays the descriptive name of this account.
Enter, or click to select, the organization responsible for the tax liability for this tax code. You can set up multiple sales codes for the same jurisdiction, if multiple organizations are responsible for collecting and paying taxes in those jurisdictions.
This field displays the descriptive name of this organization.
Enter, or click to select, the tax type of this tax code line. This tax type must already exist on the Manage Tax Types screen.
Enter the tax rate you want to apply when this tax code is in use.
Select this check box to compound this sales tax account with another sales tax account in this table window. All sales tax accounts that have this check box selected are compounded. Compounding occurs when a tax is applied not only to the item sold, but also to other taxes applied to the same item.
For example, your company purchases an item for 1000.00 currency units (dollars, Euro, etc.). Two types of tax are charged (national and state/province). The national rate is 1.5% of the purchase price and the state/province rate is 4% of BOTH the purchase price and the national tax charged on the purchase. Because the second (state/province) tax is compounded, the tax that is charged on this purchase is 15.00 for national and 40.60 for state/province. If no taxes are compounded, the tax that is charged on this purchase is 15.00 for national tax and 40.00 for state/province.
This field displays the effective tax rate. For those taxes that are not compounded, the effective tax rate matches the Tax Rate. For compounded taxes, the effective tax rate may be greater than the Tax Rate.
Select this check box to indicate that this tax is recoverable. The recoverable status is linked with the Tax Type and is maintained on the Manage Tax Types screen. Recoverable taxes are those that are refunded by the taxing authority (government) and are most often value-added taxes. After a recoverable tax has been paid, proof of payment is submitted to the taxing authority, which later provides a refund.
Enter, or click to select the appropriate reference number 1 if REF00001 is used for data entry.
Enter, or click to select, the appropriate reference number 2 if REF00002 is used for data entry.
Enter, or click to select, the account number you want to use for recoverable taxes for this tax code and account combination.
Enter, or click to select, the organization you want to use for recoverable taxes for this tax code and account combination.
Enter, or click to select, the REF00001 you want to use for recoverable taxes for this tax code and account combination.
Enter, or click to select, the REF00002 you want to use for recoverable taxes for this tax code and account combination.
Enter, or click to select, the account number you want to use for the recoverable suspense for this tax code.
Enter, or click to select, the organization you want to use for the recoverable suspense for this tax code and account combination.
Enter, or click to select, the REF00001 you want to use for the recoverable suspense for this tax code and account combination.
Enter, or click to select, the REF00002 you want to use for the recoverable suspense for this tax code and account combination.