Use Tax. Set up the state taxing information and tax rate. Multiple state taxes can be set up.

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1 Use Tax Overview Sales Tax is collected on tangible property and certain services (depending on the local tax laws), by the seller/rental agent on behalf of the state, county, or municipality; however, there are cases in which sales tax is not collected. In these cases it is the responsibility of the buyer/renter to pay Use Tax. I. Set Up the Use Tax 1. Set the State Use Tax Information: Navigate to: System Tables>State Tax Codes Set up the state taxing information and tax rate. Multiple state taxes can be set up. Double click the state in the browse window to edit an existing Tax Code, or click Add to enter a new Tax Code. State Tax ID: Enter a two letter code for this Use Tax. It is recommended that the two-letter Postal ID for the state be used. If there are multiple rates due to different county laws, the Use Tax code can be a non-state code. Page 1 of 10

2 Example: New York City has a rate of 8.75%, but a property in Upstate NY has a rate of 9..75%. New York City can have a State ID of NY and the Upstate NY can have a State ID of NS. State Tax Description: Enter the full name of the state or Use Tax region. Use Tax %: Enter the use tax percentage for this Code. Click Save. 2. Set the Taxing State: In a single-property database navigate to System Tables>Company Information. Click Update, enter the Taxing State for the company and Press <F2> or press Save to save. Page 2 of 10

3 In a multi-property database navigate to: System Tables>Properties Double-click the property to modify or highlight it and click Update. Page 3 of 10

4 Enter the Taxing State for the property. Click Save. 3. Set the Tax Information for the G/L Account Navigate to: General Ledger> Maintenance>General>Chart of Accounts Page 4 of 10

5 Enter the G/L account to be designated as the Use Tax account, or use the other filter fields to search for the account. Double click the account or press update to update the information in the right pane. There are two fields that relate to Use Tax that need to be set: Use Tax Account? Is this account to be used for recording tax postings? Yes No This account will be used to record Tax liabilities. Any G/L account that is checked will be included on the Tax Accounts report. This account will not be used to record Tax liabilities. Apply Use Tax? Will amounts posted to this account be subject to a Use Tax calculation? Yes No Invoices posted to this account will need Use Tax calculated Invoices posted to this account should not have Use Tax calculated Note: As a rule, the Apply Tax? field should be set to No, as it would be decision made at the invoice entry step and not a general decision that all postings to this account would have Use Tax calculated on it. Press <F2> to save the entries. Page 5 of 10

6 4. Set the Vendor Files for Tax Navigate to: Accounts Payable> >File Maintenance>File Maintenance>Vendors Select Vendor TIP: Clicking Filter without entering any filter information will display a list of all vendors. Filter Information Vendor Number: Enter/Select a vendor number. Vendor Alpha: Enter all or part of a vendor alpha or press <Ctrl-L> to select a vendor alpha. Vendor Name: Enter all or part of a vendor name, or press <Ctrl-L> to select a vendor name. Status: Select a vendor status. Miscellaneous Vendor: Select whether or not to view miscellaneous vendors. Page 6 of 10

7 IATA No: Search for a Travel Agent Commission vendor by IATA number. When the criteria have been selected, click Filter to display the vendors that meet the criteria. Highlight a vendor in the browse list and double-click the vendor or click Select to display the vendor details. Click the Vendor Info Part 2 tab. Select Yes in the Taxable? field for any vendor that may have Use Tax calculated. If this field is set to No, Use Tax cannot be calculated for the vendor. Page 7 of 10

8 II. Invoice Entry When entering an invoice for which Use Tax should be calculated, there are two different methods for calculating the tax. 1) Use Tax can be automatically calculated on the total of the invoice less any exclusion amount, such as shipping charges. Tax Method: To calculate Use Tax for this invoice enter U. Tax Exclusion: If there is a portion of the invoice that should not be taxed, such as shipping, enter the amount to be excluded. For Example: If the total of the invoice is $ and the shipping amount of $85.00 is to be excluded from tax, $85.00 is entered in the Tax Exclusion field. Use tax is then calculated on the remaining $ Press <F2> to continue to the Line Item Distributions. If there are multiple Line Item Distributions for the invoice and only one distribution should be taxed, select Yes in the Tax? field for the Line Item Distribution to be taxed. Page 8 of 10

9 If the Apply Tax? field in the Chart of Accounts for the G/L account is set to No the following message will pop up: Select Yes to continue. Enter any additional Line Item Distributions, or press <F2> to save the invoice. 2) The Use Tax can be manually calculated and posted. Page 9 of 10

10 With this method, there is no U in the Tax Method field, and no amount in the Tax Exclusion field. The tax would be manually calculated, added to the expense amount to be distributed, and then a distribution line added for the use tax: In looking at the Posted Transaction Journal, the G/L is impacted the same way for each method: A/P Trade is credited the total amount of the invoice, not including tax Distribution expense accounts are debited plus any applied use tax Use Tax account is credited the amount of the applied tax Under Monthly Reports, there is a Tax Accounts report which can be run to show history of the Use Tax account and any other account flagged as a Tax Account. This report will show the tax amount applied to any invoice and can be filtered by post month/year. If there are any further inquiries, department. please refer to our website or contact the Data Plus Support Support Forum Data Plus Support Ext 3 support@dphs.com Page 10 of 10