Defining Customer Sales Taxes 11.X

Connected requires tax codes to automatically calculate the correct sales taxes for invoices and credit memos.  It supports a single or two-tiered tax calculation, such as state and city taxes.

For example, some customers are only charged a single tax, while others are charged two different taxes.  You can set up as many tax codes as needed for different tax rates and geographic areas. Tax exempt customers can be assigned a tax code that contains a zero in the percent field. It is also possible to have tax charged on the freight amount of each invoice.

TABLE OF CONTENTS

• Setting Up New Tax Codes
• Importing New and/or Updating Existing Tax Codes
• Viewing Existing Tax Code Information Easily
• Sales Tax Expanded
  • Changing the Sales Tax on an Order/Invoice
  • Sales Tax Defined By Items

Each customer must be assigned a tax code. If you do not charge sales tax, a tax with 0% rate must be set up and used for all customers.

Setting Up New Tax Codes

1. Select Setup from the A/R menu and choose Sales Taxes.

2. The Sales Taxes window will appear as shown below.

3. Click Add

Below is a brief description of the fields available to use:

Tax Code: 1-3 character alpha-numeric field

Description: Max 30 characters in length.

Type: Used for EDI exports but a value can be entered for reference purposes if required.

Tax 1 Label: Name that will appear beside the tax field on documents such as Customer Invoice and Sales Orders. For example, FEDERAL or HST

If the tax rate is greater than zero then ensure that there is a description in this field for invoice printing.
    

Tax 1%: Typically federal/state taxes. For example, enter 7% as 7.00

Tax 1 G/L No: G/L account number to which the amounts for the Tax 1 will be posted.  Connected will use the default defined in the A/R Accounts window that you assigned to Tax 1 payable.  Change this account if required.

Tax 2 Label: Name that will appear beside the tax field on documents such as Customer Invoice and Sales Orders. For example, STATE or PST

Tax 2%: Usually provincial or state taxes. Enter 8% as 8.00.

Tax 2 G/L No: G/L account number to which the amounts for Tax 2 will be posted.  It will default to the G/L number assigned to the Tax 2 Payable field on the the G/L Accounts window. Change this account if required.

Calculate Tax 2 on Tax 1: This option is used only if you are in a province/state where the second tax is calculated based on the invoice.  This selection can be made for either level of tax, or both.

Tax Freight: if appropriate. This option is used when tax must also be calculated on the freight amount that has been specified on the invoice. This selection can be made for either level of tax, or both.
Tax Surcharge: This applies to surcharges being calculated on customer invoices.

The following fields will also show up in the Tax selection window, making it easier to pick the correct code(s)
State/Prov
County
City

Importing New and/or Updating Existing Tax Codes

Please see the following article on how to use the import feature in Connected to update records.

Importing to Add or Update A/R Sales Taxes

Viewing Existing Tax Code Information Easily

You can print the entire Sales Tax table and values to a spreadsheet, in a flattened export file.  This makes it easy to see all the values entered.

Sales Tax Expanded

Changing the Sales Tax on an Order/Invoice

The sales taxes charged on an order/invoice are based on the tax rate that is in the customers ship-to address.  By default this is the same as the main customer address entered in the Customer Detail tab.  However, multiple different ship-to addresses can be saved for each customer.  

Ship-to addresses can also be imported.

To change the Sales Tax on an Order/Invoice, click the Ship To

Sales Tax Defined By Items

Taxes can also be charged by Item, which are defined in the Inventory Item window.

In the example below, this item is eligible for Tax 1 and Tax 2 to be charged. If there are items that should be charged only 1 tax, or tax exempt, you can check/uncheck the appropriate boxes here.