Use the sales tax program to manage tax rates by assigning tax jurisdictions to the zip code areas where you do business. Tax jurisdictions can include tax rates from multiple entities such as state, county, and city. A customer's zip code determines their default tax rate. Sales tax functionality is located under the Files menu, and under the Orders menu, in Reports.
You can create tax jurisdiction codes to identify tax rates for a jurisdiction and the G/L account (tax authority) to post the tax to. A tax jurisdiction code is not necessarily equal to one tax authority. For example, many states charge sales tax and allow counties and cities to add local sales taxes. One jurisdiction code may include the G/L accounts for more than one tax authority. The G/L account for one tax authority may be updated by more than one jurisdiction.
Use the split tax functionality to create different tax rates within a single jurisdiction. This can be useful if you have different tax rates for different sales amounts. For example, one sale at $999.00 might be taxed at a 7% rate, while a sale at $1,348.00 might be taxed at a 4% rate.
You can assign tax jurisdiction overrides to customers with incorrect default tax jurisdictions. The system determines a customer's default tax jurisdiction from the zip code associated with the ship via on their order, but you may have reason to assign the customer to a different tax jurisdiction.
You can add tax exempt numbers to customer records. Sales tax will not be added for these customers during order entry, unless a tax exception group is assigned to the customer and the product they are purchasing, and the product is flagged as always taxable.
Use line item taxability to enable a customer to determine the taxability of each line item on an order.
Some states, such as Colorado and Louisiana, allow customers to be exempt at specific jurisdiction levels. For example, a customer could be exempt from state tax, but not for local or city taxes. Use this functionality to define tax exemption statuses at specific levels of jurisdictions.
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