Tax Codes

The tax codes establish the tax rates in the system for both the standard tax processing and the enhanced tax processing as activated in the Company Taxing Parameters.
Tax codes must be setup before proceeding with Default Accounts and also Customer Information.

Tax Security Controls:

Taxes can be maintained in the Tax Codes window in the "Accounts Receivable" parameters on the Accounting tab of the Configure System Settings.
An operator must be assigned a Security Role that allows permission in System Configuration to the Accounting - Tax Codes, in order to access this table.

The ability to change the Tax Codes through out the system including in the customer file, site file and on the document is also controlled by Security Role and operator permission setup in Security Role Permissions in the Document Field Access window.

The ability to over-ride the tax dollar amount to be charged on a document is controlled by the Company Taxing Parameters flag Prompt For Document Taxes.

Changes made to either Standard Tax Code 1 or 2 on the header, details, services, or damage waiver of counter documents including Contracts, Quotes, Reservations and Invoices, are written to the Audit Log and can be viewed under the "DOCUMENT TAX CODES" category.

Tax Processing Options

There are 3 separate processing methods to handle taxing:

1. Texada SRM - Standard taxing supports two tax codes simultaneously. i.e. in Canada both GST & PST can apply to the same purchase.
   The city file can also be maintained from this option by clicking on the CITY TAXES button, as outlined in City Tax Codes.

   Standard taxing respects the exemption flags defined in Customer Information.

2. If more than two tax codes are required simultaneously, this can be achieved with the Enhanced tax processing. Please contact Texada Support to discuss and activate this processing if this applies to your firm.
   The city file and other tax exemption tables can be maintained from this option by clicking on the ADVANCED button, as outlined in the Enhanced Taxing options.

3. Alternatively the Vertex tax solution can be used for complex taxing based on the store location and the customer Shipping or Billing address.
   Please contact Texada Support to discuss and activate this processing from the Company Taxing Parameters if this applies to your firm.
   The city file can be maintained from this option by clicking on the CITY TAXES button.

   Refer to Tax Prompts by Taxing Method and Tax Maintenance Overview for the STANDARD and for the ENHANCED rules determining which taxes apply.

No Tax Over-Ride:

In this tax table, setup a code for each tax collected, plus the NTX code for NO TAX.
The NTX code is required by the system to exempt a customer from the regular tax, or in place of TAX 1 or TAX 2 if that tax does not apply.
Note: The Tax Code NTX over-rides any other code at any level.

If Vertex tax processing is employed, only the tax codes Y for Yes, and NTX are required as all taxes are included in the Tax 1 value.

The Tax Table:
The prompts to setup the tax codes are:

SEARCH

This search field is provided for all Tax methods to easily find the Tax records based on partial matches to the 'Tax Code' or 'Tax Description' values.

SEQ #

The sequence numbers track the number of tax codes entered.

CODE

Use up to 5 characters for the tax code.
e.g. GST, PST, SST, NTX, NY, FL, Y, etc.

DESCRIPTION

Type in the description to be printed on invoices.
e.g. G.S.T. or GST

TAX %

Enter the standard tax percent. Enter 7% as 7.0000

Note: This tax percent is ignored if Vertex Software is used to calculate document taxes, as Vertex maintains the tax rates.

ACCT #

Enter the G/L Account that will be credited with this tax when invoices are posted, or look up the tax G/L account in the G/L Account Search window.

Note: A G/L Control account cannot be used. Control accounts for A/R or for A/P are setup by currency in Default Accounts.

DESCRIPTION

The G/L Account description will display.

AD VALOREM

Ad Valorem taxation only applies to Standard Taxing and is used to calculate Tax 2 on top of Tax 1.

Uncheck this box if this does not apply to your firm for this tax code.
Check this box if this tax should be applied on Tax 1.

ON COST

Uncheck this box to calculate the tax normally.
e.g. The tax is calculated on the selling price of the products or services sold.

Check this box to calculate the tax based on the average cost of the products.
The tax amount is not reflected on the document, as the calculation occurs in Daily Close 2. This applies only to very specialized firms, and not to the typical rental firm.

Please contact Texada Support if your firm needs this option, to discuss specialized inventory setup to make this function work properly.

TAX CEILINGS

Window to the Tax Ceilings table to set any tax ceiling records that should apply when the tax is calculated on a new document, or when dates are modified on a converted or existing document.

Note: This feature is only available when Enhanced Tax processing is activated in the Company Taxing Parameters.

Finished?

Click ACCEPT to accept the records and to exit the table.

ACTIONS:
Additional actions provided by buttons on the Tax Code setup screen include:

• Delete a Tax Code:
  To delete a tax code, highlight the tax code and click the DELETE button.
  If the Tax Code is currently assigned to be used by a program, the Tax In Use window is generated listing the relevant areas, and the Tax Code cannot be deleted.
  e.g. Tax code defined as a Customer or division exemption, or as mandatory for a product.

• Enhanced Tax Code Settings:
  If your firm utilizes the Enhanced Taxing option as activated in the Company Taxing Parameters, click the ADVANCED button to access and maintain the city file and other tax exemption tables as outlined in Enhanced Taxing.

• City File Maintenance:
  If your firm utilizes the Standard tax method or the Vertex Tax option as activated in the Company Taxing Parameters, click the CITY TAXES button, to access and maintain the city file, as outlined in City Tax Codes.

• Import Tax Utility:
  If your firm utilizes the Standard tax method or the Enhanced Tax option as activated in the Company Taxing Parameters, new tax codes can be imported using the following actions:

  • When focus is in the "Search" field at the top of the screen the TEMPLATE button is enabled.
    Click the TEMPLATE button to generate an empty spreadsheet with the columns to capture a new tax Code with Description, Tax%, GL Account#, On Cost flag, Add Valorem flag and also the Type for Standard taxes when the “Calculate Tax On …” feature is activated in the Company Taxing Parameters.
    Enter the values for the new tax codes and save the file to a tab-delimited text file.

  • When focus is in the "Search" field at the top of the screen the IMPORT button is enabled.
    Click the IMPORT button to upload the tab-delimited text file from your client machine to the data directory on the server in preparation for importing using the Select a File to Upload utility.
    A file upload message is displayed and an error report is exported to a spreadsheet and the option is provided to import any new tax codes that do not have errors.

    Possible Tax import errors include:
    

    - Duplicate tax code in import sheet
    - Invalid chart of account
    - Tax code already exists
    - ARTC_COLLECTED_PURCHASED_BOTH must be blank, C, P or B.
    - ARTC_ONCOST must be blank, Y or N.
    - ARTC_AD_VALOREM must be blank, Y or N.