Multiple Tax Jurisdictions

[Paradigm]

We collect State Sales Tax, County Sales Tax and City Sales Tax. But not everything we collect State Sales Tax on is collected for the county or the city. Sometimes I am collecting for just the state and the county, and sometime I am collecting just for the state. How do I get this tax liability report?? I am figuring it by hand and it is NOT fun and I don't have time for this (it takes an afternoon to get the numbers figured.) Any suggestions?

[Silky7]

Hello and Welcome to the Forum!

Now, I'm not an accountant, so discuss with your bookkeeper before doing this.

If you setup your three taxes as different rates with different GL codes, they are very easily tracked.

For example. Here are the taxes broken down the same way you're proposing.

TaxSetup.PNG (37.48 KiB) Viewed 6041 times

Then I created a dummy invoice, to show how this changes the way invoices will display a new tax breakdown:

Invbreak.PNG (14.61 KiB) Viewed 6041 times

And finally, running the Revenue by GL Code Report at the end, each remittance is quite clear:

RevbyGL.PNG (13.52 KiB) Viewed 6041 times

[Paradigm]

So, what I gather from this example, I can apply more than one tax code to an invoice?? I was told this was not possible with this computer program.

[Silky7]

It's absolutely possible to apply more than 1 tax. The most common example of two taxes are GST and PST in Canada, but if you really need to track State/City/County, it's certainly possible.

[carrieswanlund]

We collect State Sales Tax, County Sales Tax and City Sales Tax. But not everything we collect State Sales Tax on is collected for the county or the city. Sometimes I am collecting for just the state and the county, and sometime I am collecting just for the state. How do I get this tax liability report?? I am figuring it by hand and it is NOT fun and I don't have time for this (it takes an afternoon to get the numbers figured.) Any suggestions?

I see how you can have multiple tax lines. However, how do you change what is taxed and what is not? We collect sales tax on extended warranty deductibles as well as the dollar amount not covered by the extended warranty. I would love a simple way to be able to do this. (I have called a few times since 2005 when the tax law changed but Mitchel 1 support was not able to give me an answer). I figure this out by hand every month also.

[carrieswanlund]

So, what I gather from this example, I can apply more than one tax code to an invoice?? I was told this was not possible with this computer program.

How do you calculate the different taxes if only some of the things are subject to tax but not others?

[Silky7]

carrie,

I'm not sure if follow you completely, so I apologize if this isn't relevant, but any given item can be taxed differently from the whole of the order. Sticking again with Paradigm's original topic idea, if we break down State/County/City, then only need to collect State on a given item:

removecertaintaxes.PNG (25.45 KiB) Viewed 5979 times

[carrieswanlund]

Thank you.

I think Washington has a unique situation because it is by dollar amount and not by item. So...they could have a single item that is $250. However, because they have a $100 deductible only $100 is subject to sales tax. The remaining $150 is not. It is usually even more complicated than that because it is multiple items that are partially subject to sales tax.

[Rich]

Thank you.

I think Washington has a unique situation because it is by dollar amount and not by item. So...they could have a single item that is $250. However, because they have a $100 deductible only $100 is subject to sales tax. The remaining $150 is not. It is usually even more complicated than that because it is multiple items that are partially subject to sales tax.

And this right here make Michigans Core tax seem not so bad.

[Silky7]

Carrie,

There may be a way to work around this, which is probably what you're doing now. Sticking with your example, the first line here is marked as non-taxable, and the second is taxed normally. If I'm misunderstanding this scenario still, could you provide a link to the Washington state tax legislation that explains this?

deduct.PNG (8.98 KiB) Viewed 5933 times

[carrieswanlund]

Carrie,

There may be a way to work around this, which is probably what you're doing now. Sticking with your example, the first line here is marked as non-taxable, and the second is taxed normally. If I'm misunderstanding this scenario still, could you provide a link to the Washington state tax legislation that explains this?

deduct.PNG

That is actually how I have been doing it. It is as clean as it can be the way you suggested. It is just never as simple as one item, of course, because the warranty pays an allowed dollar amount on each item - leaving a tax and untaxed portion on most parts and sometimes on labor. http://dor.wa.gov/docs/pubs/specialnoti ... anties.pdf

Thank you for understanding my question so clearly! - Carrie