About Sales Tax

Depending on where you do business, you may be required to collect sales tax for the parts or services you sell. If you collect sales tax, you must pay it to a tax agency on a regular schedule. AvailSuite helps automate your sales tax tracking so you can keep accurate records about the sales taxes you collect and pay.

Please follow the rules and regulations for collecting and paying sales tax in your tax district (city, county, state).

Working with Sales Tax at AvailSuite consists of the following:

1. Understanding how to use sales tax items and rates to charge sales tax
2. Determining rules and regulations on sales tax in your tax district
3. Setting up sales tax

Set up your sales tax items with rates and the tax agencies to pay, and assign taxable or non-taxable status to your items and customers.

1. Setting up tax agencies
2. Setting up tax items
3. Indicating taxable customers and items
4. Collecting sales tax

Once your sales tax information is set up, sales tax is automatically added to your invoices and orders. AvailSuite does the calculations for you.

5. Tracking and paying sales tax

You can open the Pay Sales Tax form to track what you owe, then pay the sales tax when it's due.

Using sales tax items and rates to charge sales tax

AvailSuite uses sales tax items to calculate and add sales tax charges when you make a taxable sale. When you set up a sales tax item, you assign it a sales tax rate and associate it with the tax agency to which you pay the sales tax. Once you have set up sales tax, AvailSuite automatically applies the appropriate sales tax item and rate to the sale of your taxable items. All of the sales tax items you set up can be found in your Item List.

Before you start setting up your sales tax items (you need at least one in order to charge sales tax), you need to know the Sales Tax Requirements for the location where you sell your parts and services. Part of your requirements are the applicable sales tax rates for each tax district (a city, county, or state that has a sales tax) in which you sell. You also need to know the tax agency to which you pay the collected sales tax for each of those district taxes.

• If you have a sales location where you have only one sales tax rate to charge (for a single tax district), then you can set up a single sales tax item and be done with it.
• If you have a sales location where you need to charge more than one sales tax rate, for example, a county tax and a state tax, then you need to set up two sales tax items, even if both sales taxes are paid to the same tax agency. You then need to combine these two sales tax items as a sales tax group item so that only one sales tax charge is listed on your sales forms.

Sales tax rates and requirements vary depending on your tax district. Check with your tax agency before setting up your sales tax items and rates.

Setting up tax agencies

Tax agencies are government offices that determine the requirements for sales tax collection and payment. You may need to pay your collected sales tax to one or more tax agencies, depending on the requirements for the locations (tax districts) where you do business. A tax agency is sometimes called a tax authority.

1. In the Tax Agencies view, click New.

This will open the New Tax Agency window where you'll set up the tax agency to which you pay this sales tax.

2. In the Name field, enter the name of your tax agency. For example, in California , sales tax is paid to the Board of Equalization.

You can enter the other information now, such as addresses and contacts, or you can do it later.

3. Save Tax Agency.

Click the Save and Close button.

Setting up tax items

Setup Tax Items are used to calculate the appropriate sales tax for a sale. A sales tax item includes a sales tax rate and a tax agency. When you sell taxable items, you charge the appropriate sales tax rate by assigning a sales tax item to each sale.

The sales tax rate means the percentage charged for sales tax by the tax district. For each different district/rate combination, you need to set up a new sales tax item. For example, you may sell in three counties that all charge the same sales tax rate, but you need a separate sales tax item for each county, even though the sales tax rate is the same. This allows you to track the amounts of sales tax you collect for each tax district.

A sales tax group item is an item that groups multiple sales tax items so you can charge only one rate on your sales. For example, the location where you sell may require you to charge both a county and a state sales tax. However, customers are used to seeing one sales tax rate on sales. You would set up a sales tax group item that combines those two sales tax rates, say 1% for the county and 7% for the state, to create a single, sales tax group item with a rate of 8%. You would apply this sales tax group item to your taxable sales for that county. A sales tax group item also allows you to track the separate sales tax rates on your reports so that you can pay the appropriate amounts to the appropriate tax agencies.

To setup tax items, open the Tax Maintenance form.

Using the form, you can create tax items and arrange them into tax groups.

1. To create a tax item, click the Add Tax Item button.

The Tax Item form appears. Set name, description, tax agency, and rate for the tax item. Click OK to save changes.

2. To create a tax group, click the Add Group button.

The Tax Group form appears. Set name and description for the tax group. Using Add and Remove, add tax items to be included into the tax group. The total rate for the group will be the sum of rates of tax items included. Click OK to save changes.

3. To edit a tax item or a tax group, click the Edit button.

The corresponding form appears. You can modify the tax item or the tax group parameters as you need. If a tax item or a tax group is not used in your current activities, reset the Is Active flag for it. This will hide the item at tax item and group dropdowns but will keep it at existing documents. Click OK to Save Changes.

4. To delete a tax item or a tax group from the system, click the Delete button.

Please note that AvailSuite will not allow you to delete a tax item or a tax group if it is already defined at an order or an invoice. Use the Is Active flag to hide out-of-date items and groups.

Indicating taxable customers and items

Some of your parts and services can be exempt from tax. To mark this,

1. Open the corresponding Part form or the corresponding Service form
2. Clear the Taxable flag.
3. Save changes.

There can be various tax regulation applied for you customers. Some customers can be exempt from some taxes. You can define default taxes for a customer on the Misc tab of the customer form.

Collecting sales tax

When you create an order or an invoice for a customer, AvailSuite uses by default the Tax value of the customer. For order details and invoice details with services / parts marked as taxable, it sets the value as the tax. For non-taxable order and invoice details, it sets the No Tax value by default.

You always can change tax values for particular order or invoice details at the Tax column of the Details grid.

Please note that AvailSuite adds taxes in your collection when you move the invoice into the Completed status. That is, AvailSuite does not count taxes at your orders, or taxes assigned to draft, negotiated, canceled or on hold invoices. Usually, you mark an invoice as completed when you get all payment for it. This is the time to collect sales tax for it.

If you move an invoice back to draft, taxes of the invoice will be also removed from tax collections.

Tracking and Paying Sales Tax You Owe

The feature is unavailable in Personal edition.

Open the Pay Sales Tax form (click Maintenance | Taxes | Pay Sales Tax ) to view tax you paid and you owe.

AvailSuite will display you the list of your taxes with amount paid, amounts due, and the last payment date.

When you need to track a tax paid follow the instruction.

1. Click the Pay button on the Pay Sales Tax form.

AvailSuite will open the Pay Tax form.

2. Define the amount paid and (optionally) period that is covered by the tax payment.
3. Click the Pay button.

AvailSuite will open the AP Payment form with the tax agency as the payee.

4. Review the payment and click Save and Close to complete the operation.

The payment will be added to the amount paid of the tax item.