SALES TAX. Sales Tax Maintenance Canadian Sales Tax Copy Print Report Print Summary Set Date Tax Exemption End of Month End of Year

Transcription

1 Sales Tax Maintenance Canadian Sales Tax Copy Print Report Print Summary Set Date Tax Exemption End of Month End of Year

2 This manual contains reference information about software products from Activant Solutions Inc. The software described in this manual and the manual itself are furnished under the terms and conditions of a license agreement. The software consists of software options that are separately licensed. It is against the law to copy the software on any medium, or to enable any software options, except as specifically permitted under the license agreement. In addition, no part of this manual may be copied or transmitted in any form or by any means without the prior written permission of Activant Solutions Inc. From time to time, Activant makes changes to its software products. Therefore, information in this manual is subject to change, and the illustrations and screens that appear in the manual may differ somewhat from the version of the software provided to you. Created by: Yardley Technical Communication 2006, Activant Solutions Inc. All rights reserved. Activant and the Activant logo are registered trademarks and Activant Prophet 21 is a trademark of Activant Solutions Inc. All other company or product names are the trademarks or registered trademarks of their respective companies. Activant Solutions Inc Southfront Road Livermore, CA Version 18.0 Publication Date: DOCUMENTATION CONVENTIONS The eyeglass symbol ( ) indicates a field on which you can browse. The star ( ) indicates the default for a field. To allow for the widest possible parameters when printing a report or performing a function, accept the defaults for all of the parameter fields. To accept the defaults, either escape through all the fields, or press [Enter] without specifying any values. Generally, samples in the documentation are shown using the default values. Start and End parameters define the limits to a range of information you will print on a report. If information does not appear on a report, it may be because the information was excluded from the Start, End range. For a detailed explanation on how maintenance screens function, refer to the Tour Guide manual. Use the search tool in Adobe Acrobat Reader 4.05c or higher to find which manual describes a specific module, job, or function. ii

3 Table of Contents 1 INTRODUCTION 5 Main Menu 5 2 MAINTENANCE 7 Sales Tax Maintenance Screen 7 Fields for Optional Packages 11 Company-Wide Tax Schedules 12 Canadian Sales Tax Maintenance 13 Canadian Sales Tax 14 Item and Catalog Records 14 Example 15 Things to Remember 15 3 COPY 17 Sample: Sales Tax Copy 18 4 REPORTS 19 Set Date 19 Master Sales Tax List 19 Sample: Master Sales Tax List 21 Invoiced Sales Tax Report 21 Parameters 21 Invoiced Sales Tax Report 22 Sample: Invoiced Sales Tax Report 22 Sales Tax Audit Report 23 Sample: Sales Tax Audit Report 25 Sales Tax Summary 25 Parameters 26 Sample: Sales Tax Summary 26 Sample: Sales Tax Summary - Totals 27 iii

4 Balancing Sales Tax Reports with Other Reports 27 5 EXEMPTION MATRICES 28 Matrix Maintenance Screen 29 List 30 Sample: Matrix List 30 6 END OF MONTH/YEAR 32 End of Month Procedures 32 End of Year Procedures 32 7 HOW DO I Know that I have used the correct sales tax schedule number for each invoice?33 Ensure that the totals on my sales tax reports are accurate? 33 Print an invoice that will not print due to invalid tax schedule? 34 Charge tax to my customers for waste disposal and include this tax on the invoice? 34 Report on sales tax other than through the sales tax module? 34 Charge sales tax only? 34 Issue a credit for sales tax only? 34 Set up a sales tax exemption matrix? 34 Reset the Invoiced Sales Tax report? 35 8 PROCEDURES 36 Charging Sales Tax Only 36 Issuing a Credit for Sales Tax Only 39 Setting Up a Sales Tax Exemption Matrix 41 Set Sales Tax Schedule by Ship-To Zip Code 42 Company 42 Sales Tax 43 Order 45 Order, Front Counter, Expedite Order 45 iv

5 1 INTRODUCTION The Sales Tax module allows you to enter, edit, and delete sales tax schedules. This module interacts with the Customer, Order, and Invoice modules to make processing taxable sales easier and more efficient. Sales Tax is set up in terms of tax schedules that are identified by a schedule number. You set up schedules by branch. The combination of a schedule number and branch number constitutes a sales tax schedule. Each taxable customer is assigned a sales tax schedule. A sales tax schedule describes a sales tax rate and indicates whether freight is taxable. Sales tax is accumulated for each schedule as part of the invoicing process. The system tracks period-to-date and year-todate tax totals. The sales tax schedules and the corresponding invoiced totals are printed in the Invoiced Sales Tax Report. This report shows both the period-to-date and year-to-date sales tax information. The report parameters allow you to reset the period-to-date or year-to-date totals. In addition, the system generates the proper source documents for you to send to the appropriate tax jurisdictions. You can print a Sales Tax Summary for state, county, and city taxes. MAIN MENU Sales Tax Maintenance... access the Sales tax maintenance screen. Sales tax maintenance allows you to enter, edit, and delete sales tax information. For more information on this option, refer to page 7. Copy... copies tax schedules from a source branch to a destination branch. For more information on this option, refer to page 17. Invoiced Sales Tax Report... prints the Invoiced Sales Tax Report. For more information on this option, refer to page 19. 5

6 1 INTRODUCTION Sales Tax Summary... prints the Sales Tax Summary. For more information on this option, refer to page 23. Set Date... sets the report date. For more information on this option, refer to page 19. Exemption Matrices... accesses sales tax exemption matrices. Exemption matrices allow you to enter, edit, or delete sales tax exemption matrix information. The Exemption matrices option only appears on the Sales Tax Information menu if Sales Tax Exemptions is enabled in the company options. For more information on this option, refer to page 28. 6

7 2 MAINTENANCE MAINTENANCE SCREEN When you select the Sales Tax Maintenance option, the Sales Tax Maintenance screen appears. There are five modes available: navigation, view, edit, add, and delete. When you first enter the maintenance screen, you are in the navigation mode. Because navigation, view, edit, add, and delete screens are identical, only the navigation mode screens are shown in this manual. Refer to the Tour Guide for a detailed explanation of each mode. Branch... identifies the branch where the order is entered. Branch is 2 characters and holds numbers only. Schd #... specifies the sales tax schedule number. All customers have an associated schedule that governs the sales tax they are charged. Several fields in the system reference the schedule number. Schd # is referenced by the State Tax Schedule or the Other Tax Schedule field in the Customer Ship-To information in the customer record; it is also referenced by the S-Schd or the O-Schd field in the Customer Alternate Ship-To record. You can also edit the schedule number at order entry time using Ship Info on the order entry header screen. Schd # is 4 characters and holds numbers only. 7

8 2 MAINTENANCE Tip! Setting Up Sales Tax Schedule Numbers The Invoiced Sales Tax Report is sequenced by branch and schedule number. When you are setting up sales tax schedule numbers, one option is to assign numbers to your schedules that will correspond with the way you want them to appear on the Invoiced Sales Tax Report. For example, if you want to sequence the Invoiced Sales Tax Report by percentage, one option is to assign schedule numbers that will correspond with the % field. You might make sales tax schedule number 6 correspond with a local 6% sales tax; this way, the schedule number relates to the tax percentage. Name... the descriptive name for the sales tax schedule. You can assign a name to each of your sales tax schedules. For example, you may name a schedule Pennsylvania State Tax, or TX/Tarrant County/FW City. Name is 26 characters and holds numbers and letters. Item Limit... specifies the maximum taxable amount per line-item. Item Limit defines the tax ceiling per line-item. If the unit price of the line-item exceeds the amount in Item Limit, the tax is only charged on the amount in the Item Limit field. The amount exceeding the limit is not taxed. For example, if Item Limit is set to $6000, and the unit price of a line-item is $6500, the amount that exceeds the Item Limit (in this case $500) is not taxed. Item Limit is 11 characters, including the decimal point, and holds numbers only. 8

9 2 MAINTENANCE Tip! Calculations for Tennessee and North Carolina You must set up two sales tax schedules for Tennessee: one schedule for state taxes, and one schedule for local taxes. The Item Limit of the local sales tax schedule must be set to $1600 to accommodate the special sales tax calculations for Tennessee. If the unit price of a line-item exceeds $1600, the sales tax is calculated as follows: The state tax is charged at a flat rate, as always. The local tax is set to the maximum and charged to exactly $1600. For example, using a state tax of 5.5%, and a local sales tax of 1.5%, the taxes on one item at a price of $1700 would be calculated in the following manner: The state tax 5.5%, is applied against the entire amount of the order: $1700 X 5.5% = $ The local tax, 1.5%, is applied against only the first $1600 of the order: $1600 X 1.5% = $ You must set the Item Limit of North Carolina sales tax schedules to $8000 to accommodate the special sales tax calculations for North Carolina. If the unit price of a line-item exceeds $8000, the sales tax is calculated at the scheduled tax rate on the first $8000. The amount of sales exceeding $8000 is not taxed. Invoice Limit... specifies the maximum taxable amount per invoice. Invoice Limit defines the tax ceiling per invoice. If the taxable amount per invoice exceeds the amount in Invoice Limit, the tax schedule is only applied against the default limit. The amount exceeding the limit is not taxed. For example, if the Invoice Limit is set to $7000, and the items on an invoice equal $8000, the amount that exceeds the Invoice Limit (in this case, $1000) is not taxed. Invoice Limit is 11 characters, including the decimal point, and holds numbers only. State %... identifies the state tax percent being collected. State % is 7 characters and holds numbers only. State ID... identifies the state tax The State ID field is a user-defined number. This field provides detail about state information on the Sales Tax Summary report. If you leave this field blank, the state tax information in the Sales Tax Summary report will be zero (0). County %... identifies the county tax percent being collected. County % is 7 characters, including the decimal point, and holds numbers only. County ID... identifies the county tax. The County ID is a user-defined number. This field provides detail about county tax information on the Sales Tax Summary report. If you leave this field blank, the county information in the Sales Tax Summary report will be zero (0). County ID is 4 characters and holds numbers only. City %... identifies the city tax percent being collected. City % is 7 characters, including the decimal point, and holds numbers only. 9

10 2 MAINTENANCE City ID... identifies the city tax. The City ID field is a user-defined number. This field provides detail about city tax information on the Sales Tax Summary report. If you leave this field blank, the city information in the Sales Tax Summary report will be zero (0). Total %... identifies the total tax being charged on this schedule. Total % is the sum of State %, City %, and County %. For example, if the state tax is 7%, and the county tax is 2.5%, the system automatically calculates the total % as 9.5%. When you print the Sales Tax Summary Report, the system calculates State Tax % to be equal to Total % minus the sum of County % and City %. Total % is 7 characters, including the decimal point, and holds numbers only. Incoming Freight... specifies whether tax will be charged on incoming freight for customers invoiced using this tax schedule. When this field is set to Y - tax will be charged on inbound freight. N - tax will not be charged on inbound freight. Outgoing Freight... specifies whether tax will be charged on outgoing freight for customers invoiced using this tax schedule. When this field is set to Y - tax will be charged on outgoing freight. N - tax will not be charged on outgoing freight. Total Sales... accumulates period-to-date and year-to-date sales for this tax schedule. Total Sales is automatically updated when invoices are printed. This figure includes both taxable and nontaxable sales; however, it does not include freight. The Total Sales field includes the value of handling charges if you charge an order minimum. Total Sales is 11 characters, including the decimal point, and holds numbers only. Taxable Sales... accumulates period-to-date and year-to-date taxable sales. Taxable Sales is automatically updated when invoices are printed. This figure does not include freight. Taxable Sales is 11 characters, including the decimal point, and holds numbers only. Taxable Freight... accumulates period-to-date and year-to-date freight that was taxed by this schedule. Taxable Freight is automatically updated when invoices are printed. Taxable Freight is 11 characters, including the decimal point, and holds numbers only. 10

11 2 MAINTENANCE Tax Charged... accumulates period-to-date and year-to-date tax charged. Tax Charged is automatically updated when invoices are printed. This figure includes taxable sales and taxable freight. Tax Charged is 11 characters, including the decimal point, and holds numbers only. FIELDS FOR OPTIONAL PACKAGES Some of the following fields may appear in the Sales Tax Maintenance screen. These fields are optional fields that only appear if the related software is enabled on your system. For an explanation of these fields, refer to the documentation for the optional software. Field Name Tax Type 0% Tax Type 1% GST Optional Software Required Canadian Sales Tax company option Canadian Sales Tax company option Canadian Sales Tax company option 11

12 2 MAINTENANCE COMPANY-WIDE TAX SCHEDULES Sales tax schedules can be created company-wide using Branch 0 (zero). The following screen shows an example of a company-wide sales tax schedule. All forms of invoicing have been modified to search for the branch-specific schedule first. If one does not exist, a search will be performed for the company-wide schedule. Note: If you create company-wide tax schedules, you can run hidden option "0+" in the Sales Tax module to combine the values of the branch-specific tax schedules into the company-wide schedule. In addition, the branch schedules can be optionally deleted through this hidden option. If the branch-specific schedules are not deleted, they will still be used during invoicing. It is recommended that the branch schedules be deleted. For more information on the fields found on the Sales Tax Maintenance screen, refer to the Sales Tax Maintenance Screen section on page 7. 12

13 2 MAINTENANCE CANADIAN MAINTENANCE If you enable the Canadian Sales Tax feature in the Company Record, the following screen will appear when you select the Sales Tax Maintenance option from the Sales Tax Information menu. Tax Type 0 %... indicates the tax rate for services provided. When you enter a sales tax schedule number in the Other Tax field of a customer record, the tax percentage entered in Tax % Type 0 in that sales tax schedule is applied as the Other/Goods and Services Tax. Tax Type 1 % GST Taxable... indicates the tax rate for products sold.... indicates whether the system applies the Provincial Sales Tax (PST) to the value of the item or to the value of the item plus the item s Goods and Services Tax (GST). When this field is set to Y - the system applies the PST to both the value of an item and the GST. N - the system only applies the PST to the value of the item. Note: For example, an item is $10, the GST is 7%, and the PST is 5%. If GST Taxable is set to Y, the system applies the PST to both the value of an item and to the GST. $ (GST) = $10.70 $ (PST) = $ If GST Taxable is set to N, the system only applies the PST to the value of the item. $ (GST) (PST) = $11.20 GST is only applied to the value of an item. For more information on the other fields that appear, refer to the Sales Tax Maintenance Screen section on page 7. 13

14 2 MAINTENANCE CANADIAN Canada has two types of sales tax: Provincial Sales Tax (PST), and Goods and Services Tax (GST). The State Tax field in the Sales Tax Maintenance Screen corresponds with the PST, and the Other Tax field corresponds with the GST. The system uses the State Tax and Other Tax fields and the applicable sales tax schedule to control the way the PST and GST are applied. When you enter a sales tax schedule number in the State Tax field of a customer record, the system applies the tax percentage in either the Tax % Type 0 field or the Tax % Type 1 field as the State/Provincial Sales Tax. This tax percentage applies only to those order items for which you set the State Tax field to Y in Order Entry. Whether the system uses the figure in Tax % Type 0 or Tax % Type 1 is determined on an item-by-item basis by the setting of the Tax Class field in the Item and Catalog records. When calculating taxes, the system checks the State Tax field and the Other Tax field in the Order record. If either of these fields is set to Y, the system then checks the State Tax field and Other Tax field in the customer record to find the applicable sales tax schedule. The system finds the tax percentages, and applies them to the order item. The system first calculates an item s Other/Goods and Services tax, then determines whether the Other/Goods and Services Tax should be included in the taxable amount when the State/Provincial Sales Tax is calculated. The system then applies one of two State/Provincial Sales Tax percentages. ITEM AND CATALOG RECORDS When you enable the Canadian Sales Tax feature, the Tax Class field appears in the Item and Catalog records. 14

15 2 MAINTENANCE Tax Class... determines the tax percentage applied as the State/Provincial sales tax. When this field is set to 0 - PST is determined based on the figure in the Tax % Type 0 field in the sales tax schedule. 1 - PST is determined based on the figure in the Tax % Type 1 field in the sales tax schedule. 2 - No PST applies. The system does not use either figure from Tax % Type 0 or Tax % Type 1. Note: The State Tax field in Order Entry must be set to Y. If the State Tax field is set to N, the values in Tax Class, Tax %, and GST Taxable are meaningless. EXAMPLE If an item is a nonstock and noncatalog item, it has no Item or Catalog record. In this case, the Tax Class field appears in the Order Entry screen and functions in the same manner as the Tax Class field in the Item and Catalog records. A single-stock item is entered on an order at a sales price of $100. Both the State Tax and Other Tax fields in Order Entry are set to Y. The Tax Class field in the Item Record is set to 1. The Other/Goods and Services Tax is applied in the usual fashion; the system checks the Customer record for the appropriate sales tax schedule and applies the value from the Tax % Type 0 field. (The system ignores the value in the Tax % Type 1 field.) If the value in the Tax % Type 0 field is 5%, then the Other/Goods and Services Tax is equal to $5. The system then checks the Customer record for the appropriate State/Provincial sales tax schedule and checks the setting of the GST Taxable field. If GST Taxable is set to Y, the system adds the Other/Goods and Services Tax ($5) to the sales price ($100) before applying the State/Provincial Sales Tax. As mentioned, the item belongs to Tax Class 1; therefore, the system applies the percentage from the Tax % Type 1 field. (The system ignores the value in the Tax % Type 0 field.) If the value in the Tax % Type 1 field is 10%, then the Provincial Sales Tax is $ The total price is $ Item price ($100) X GST (5%) = $ PST (10%) X $ = $ THINGS TO REMEMBER There are several things to keep in mind when you are using Canadian sales tax. When the system uses a sales tax schedule to calculate State/Provincial Sales Tax, the Invoice Limit field is ignored. The Invoice Limit field specifies the maximum taxable amount per invoice; however, the State/Provincial Sales Tax is determined on an item-by-item basis using either of the values entered in the Tax % Type fields. Neither of these values can be used to calculate a State/Provincial Sales Tax for a dollar portion of an order s total sales price. Therefore, when the system calculates State/Provincial Sales Tax, the Invoice Limit is suppressed in the appropriate Sales Tax schedule. An order s freight charge is taxed as a separate item. Both the Other/Goods and Services Tax and the State/Provincial Sales Tax are calculated based on the sales tax schedules found in the customer record. A freight charge is always treated as an item with Tax Class 0. Therefore, the State/Provincial Sales Tax is calculated based on the percentage entered in the Tax % Type 0 field in the appropriate sales tax schedule. 15

16 2 MAINTENANCE The Tax Included field in the Customer record is used to incorporate the Other/Goods and Services Tax into an item s sales price for display purposes only when the invoice is printed for the customer. For processing purposes, the Other/Goods and Services Tax is still considered separate from the sales price. The system does not necessarily use the invoice display sales price when calculating the State/Provincial Sales Tax. If the GST Taxable field in the State/Provincial Sales Tax schedule is set to N, the State/Provincial Sales Tax is calculated based on the actual sales price. For example, an item s sales price is $10, and its Other/Goods and Services Tax is 10% or $1. If the Tax Included field is set to Y, this tax will appear as part of the sales price when the item s corresponding invoice is printed. In other words, the item s sales price will print as $11, but its State/Provincial Sales Tax schedule is set to N, the State/Provincial Sales Tax is calculated based on the actual sales price of $10. The item s price will appear as $11, but its State/Provincial Sales Tax will be based on a sales price of $10. To avoid this discrepancy, the GST Taxable field in the State/Provincial Sales Tax schedule should be set to Y. Totals for the two Provincial/State Sales Tax percentages (Tax % Type 0 and Tax % Type 1) print for each invoice that is included on the Invoice Register and Sales Journal. 16

17 3 COPY The Copy option allows you to copy tax schedules from one branch and use these schedules to automatically create schedules at the destination branches. No period-to-date or year-to-date information will be copied. When you select the Copy option from the Sales Tax Information menu, a screen similar to the following appears: Sales Tax Copy Source Br #... specifies the source branch number. Source Br # automatically defaults to the branch set during LOGON if you do not specify another branch number. Source Schedule Numbers Start, End... source schedule numbers that will be included in the copy. Destination Branch Numbers Start, End... destination branch numbers in which the schedule information is created. The newly created schedules will use the same schedule numbers assigned to them at the source branch location. 17

18 3 COPY SAMPLE: COPY In the following example, schedules 40 and 41 from Branch 1 will be copied to create schedules 40 and 41 at Branches 2 and 3. After the copying process is complete, the system prints a list for verification. 18

19 4 REPORTS There are two reports available within the Sales Tax module: the Invoiced Sales Tax Report and the Sales Tax Summary. In addition, you have the option to change the print date that appears in the report header. SET DATE When you select the Set Date option from the Sales Tax Information menu, a screen similar to the following appears: Report Date... indicates the date that the report is printed. Report Date defaults to the current date unless otherwise modified. This field is only informational, and the report will not be restricted in any way by this setting. If you change the setting of the report date, it has no effect on the actual figures on the sales tax reports. The figures on the report will accumulate until you perform a reset. One option is to change Report Date to accurately show the last day of the month on a report you are printing specifically for end of month or end of year figures. For example, if the last day of the month is Sunday, you may not perform your end of month procedures until Monday. In this case, you may wish to modify the report date from the system default. For example, you might modify the report date from Monday s system default of 12/1/02 to Sunday s date: 11/30/02. This way, for auditing purposes, the report displays the correct end of the month date rather than the default system date. Report Date is 6 characters and holds numbers only in the MM/DD/YY format. MASTER LIST The Master Sales Tax List displays general information on each tax schedule that exists, but PTD/YTD values are not shown. That information is shown on the Invoiced Sales Tax Report. 19

20 4 REPORTS To generate the report, choose the Reports option from the Sales Tax main menu; then choose the Master Sales Tax List option from the Reports menu: The following parameter screen appears: Branch Start/End Tax Schedule Start/End State ID Start/End County ID Start/End City ID Start/End... range of branches on which to run the report.... range of tax schedules displayed on the report.... range of state identification codes on which to run the report.... range of county ID codes used to generate the report.... range of city identification codes that are shown on the report. After the parameters are complete, press [F2] to generate the report. 20

21 4 REPORTS Sample: Master Sales Tax List INVOICED REPORT The Invoiced Sales Tax Report shows a list of Sales Tax Schedules and their Invoiced Tax Totals. PARAMETERS When you select the Invoiced Sales Tax Report option from the Sales Tax Information menu, a screen similar to the following appears: Start, End Branch Start, End Schd... branches that will be included on the report.... schedules that will be included on the report. 21

22 4 REPORTS Reset Sales Tax Info... indicates when an invoiced sales tax period is over. Reset is used at the end of a sales tax period. It is typically used at month end or year end to zero out pertinent figures. You must activate Q-Mode to perform the PTD or YTD reset. When this field is set to PTD - period-to-date invoiced sales tax information is reset to zero. YTD - year-to-date and period-to-date invoiced sales tax information is reset to zero. NO - invoiced sales tax information is not reset. Important: Be sure to print a Sales Tax Summary report before resetting. Reset clears the PTD information on both reports. INVOICED REPORT The Invoiced Sales Tax Report shows every schedule that has been defined in the system and their respective period-to-date and year-to-date totals. At the header of the report, the system prints the system date and time to identify when the report was printed. You can enable autobatching for sales tax through the Autobatch Default option in the Ledger module. Once this is enabled, a sales tax batch is automatically created in the general ledger if PTD or YTD invoiced sales tax information is reset while you are running the Invoiced Sales Tax Report. You can review, edit, and post the sales tax batch in Ledger. For more information of autobatch posting to the general ledger, refer to the Ledger manual. Note: You must reset PTD to complete any Invoice Register batches, which are created when you clear the register. Resetting PTD allows these Invoice Register batches to be posted. If you do not enable autobatching for sales tax, you must manually post the appropriate accounts and sales tax totals to the general ledger. If an order has both a State Tax schedule and an Other Tax schedule, the sale is recorded twice on the report. SAMPLE: INVOICED REPORT Schd Name... sales tax schedule name that identifies the type of tax being charged. Tax %... the total tax being charged on this schedule. 22

23 4 REPORTS Freight In... indicates whether a tax schedule charges tax for incoming freight. Freight Out... indicates whether a tax schedule charges tax for outgoing freight. PTDTotalSales... period-to-date total sales. Total Sales includes the value of handling charges if you have a minimum order amount set up in a customer s record. YTDTotalSales... year-to-date total sales PTD Tax Sales YTD Tax Sales PTD Tax- Frgt YTD Tax- Frgt PTD Tax- Chrg YTD Tax- Chrg... period-to-date taxable sales.... year-to-date taxable sales.... period-to-date taxable freight.... year-to-date taxable freight.... period-to-date tax charged.... year-to-date tax charged. AUDIT REPORT The Sales Tax Audit Report details invoice transactions, write-offs performed in Receivables, sales tax schedule swaps performed in Receivables, and manual edits to the sales tax schedule. Note: For more information on sales tax schedule swaps, refer to the next section. Every customer order or customer return that is invoiced appears on the report. In addition, if the sales tax write-off feature in Receivables is used to adjust the sales tax schedule, an entry is made on the report. The Sales Tax Audit Report can be generated by tax schedule number by branch sequence, and totals sales amount, freight amount, tax amount, and total invoice amount for each schedule. Branch totals and a grand total are also provided. Page breaking will occur for each branch and when needed. 23

24 4 REPORTS To generate the Sales Tax Audit Report, select the Reports option from the Sales Tax main menu; then choose the Sales Tax Audit Report option: The following parameter screen appears: Branches Start/End Tax Schedules Start/End... range of branches on which the Sales Tax Audit Report is generated.... range of tax schedules on which to generate the report. Transaction Dates Start/End... range of transaction dates that make up the report. Only transactions with dates on or between the transaction date range are shown on the report. Note: When Q-Mode is enabled, an option to reset the report is also available on the parameter screen. If resetting is performed, any entries that print on the report are also cleared from the system data. The data may be kept as long as desired, but resetting monthly is recommended. After the parameters are completed, press [F2] to generate the report. 24

25 4 REPORTS Sample: Sales Tax Audit Report SUMMARY It is recommended that you print the Sales Tax Summary prior to the reset of the Invoiced Sales Tax Report. The system calculates the sales tax charged to a customer based upon shipping destination. If more than one taxing jurisdiction is involved, the sales amount is multiplied by the tax rate for each jurisdiction and the total tax is printed on the invoice. The system then segregates the various sales taxes and totals them at month-end for each separate taxing entity on the Sales Tax Summary. The totals that appear on the Sales Tax Summary do not reflect totals of individual sales tax schedule numbers. Totals are accumulated by the State/County/City IDs assigned in each sales tax schedule. The Sales Tax Summary will only show one schedule number per state/county/city ID. These three IDs work together to sort schedules on the Sales Tax Summary Report. The totals will be sequenced by the highest schedule number with the same State/County/City ID; however, the totals will reflect all schedules that share that ID. For example, you set up three schedules for Pennsylvania: 132, Philadelphia; 250, Bucks County; 300, Lower Buck County. You would assign the same state ID to these schedules, but you assign two different county IDs: one county ID for both Bucks county schedules, and a separate county ID for Philadelphia. In this way, Philadelphia would appear on one line of the Sales Tax Summary, and the totals for the other two would appear as another line. These totals will be sequenced by the highest of the two schedule numbers. In this case, the totals will be sequenced by 300. The highest schedule number for the same state/county/city ID combination will be the only schedule reported, although the totals will reflect all schedules that share the same state/city/county ID. Company totals print immediately following the last branch. Company totals for PTD and YTD appear separately. Branch totals print on a separate page immediately following the last State/County/City ID. Branch totals for PTD and YTD appear separately. 25

26 4 REPORTS PARAMETERS When you select the Sales Tax Summary option from the Sales Tax Information menu, a screen similar to the following appears: Start, End Branch Start, End Schd... branches that will be included on the report.... sales tax schedules that will be included on the report. SAMPLE: SUMMARY Schd... sales tax schedule number. The descriptive name for the sales tax schedule will appear below the number. St/Cnty/City... state, county, and city ID. Total Sales... total sales. Tax-Sales... total sales that were taxable. Sales Tax... total sales tax charged. State Tax... state sales tax charged. County Tax... county sales tax charged. City Tax... city sales tax charged. Tax Frght... total freight that was taxable. 26

27 4 REPORTS Frght Tax... total freight tax charged. Total Tax... total tax for this schedule. SAMPLE: SUMMARY - TOTALS BALANCING REPORTS WITH OTHER REPORTS The sales tax report may not balance with other monthly sales reports. If you set the Sales Tax field in a customer record to None and leave the sales tax schedule number set to 0 (zero), the sales for this customer will not be included on the sales tax reports. In other words, if you have a non-taxable customer who is not assigned to a non-taxable sales tax schedule, the customers sales will not be included in the total sales figure of a sales tax report. This causes the total sales figure on a sales tax report to be much less than the total sales figure on the invoice register, which represents the exact same invoices. The total sales on the sales tax reports will be missing the non-taxable sales. This will cause the total sales on the sales tax reports to be much smaller than the total sales on the invoice register. To avoid this, you can assign your non-taxable customers a valid sales tax schedule number. Create a sales tax schedule to calculate 0% tax, and name the schedule Non-Taxable. Assign this non-taxable sales tax schedule to all non-taxable sales. In this way, the system will include these orders in the total sales figures on the sales tax reports, but it will not include the sales in the taxable sales figures. If you set the Sales Tax field in a customer record to Some or All, you can assign the Non-Taxable 0% sales tax schedule to the customer. This will allow the customer s sales to be included in the total sales, and the tax charged will be If an order has both a state tax schedule and an other tax schedule, the sale is recorded twice on the Invoiced Sales Tax Report. For those customers whom you charge both a state tax and an other tax, you can assign a schedule number that will print at the end of the range of the sales tax report. For example, one option is to assign a sales tax schedule number 9999 to represent the other tax. In this way, when you print the sales tax report, you could restrict the parameters to print only schedules This would exclude the other tax from printing on the report, and the total sales should match the total sales on your Monthly Invoice Register. To get the total tax charged for all schedules, you need to print the report with the full range of schedules (1-9999). You must also print the report with the full range of schedules in order to perform a reset. 27

28 5 EXEMPTION MATRICES In certain circumstances, whether or not material is taxable to a customer is dependent upon the customer, the material being sold, the intention of the material, or a combination of these things. The Exemption Matrices option allows you to set up Sales Tax Exemption Matrices. These matrices allow you to exempt sales for a particular type of material to a particular customer at a particular shipping branch. In other words, you can use these matrices to determine whether customers are charged sales tax for the items they buy. When you select the Exemption Matrices option from the Sales Tax Information menu, the following screen appears: Matrix Maintenance... accesses the Exemption Matrix Maintenance screen. For more information on this option, refer to page 29. List...prints a list of exemption matrices. For more information on this option, refer to page

29 5 EXEMPTION MATRICES MATRIX MAINTENANCE SCREEN When you select the Matrix Maintenance option from the Exemption Matrices menu, the following screen appears: Branch Sched #... the Order Branch number associated with this matrix.... the sales tax schedule number associated with this matrix. Each customer had an associated Sched # that corresponds to the sales tax the customer pays. Exemp #... exemption number that determines whether an item is exempt from sales tax. Each item has an associated Exemp # that determines whether the item is exempt from sales tax. When a customer places an order for an item, the system scans the order sales-tax schedule number and the item record for an exemption number. The system will then try to determine if there is a sales-tax exemption matrix for the sales branch, schedule number, and item exemption number. If a matrix is found, sales tax is not charged for the item. 29

30 5 EXEMPTION MATRICES LIST The Exemption Matrix List prints all of your exemption matrix information. Printing an Exemption Matrix List allows you to refer to a hard copy of all of your exemption matrix information. One option is to print this list once a year, or as needed for reference. When you select the List option from the Exemption Matrices menu, a screen similar to the following appears: Start,End Branch Start,EndSchd... branches that will be included on the report.... sales tax schedules that will be included on the report. Start, End Exemption... exemption numbers that will be included on the report. SAMPLE: MATRIX LIST Branch... branch number. Tax Schedule# Item Exemption#... tax schedule number.... item exemption number. 30

31 5 EXEMPTION MATRICES 31

32 6 END OF MONTH/YEAR END OF MONTH PROCEDURES 1. Process all invoices for the month. 2. Print the Sales Tax Summary. Note: If you do not need to see a breakdown of County % and City % figures, you do not need to print this report. 3. Activate Q-Mode. Set the Invoiced Sales Tax Report Reset parameter to PTD. For more information on the reset parameter, refer to page Print the Invoiced Sales Tax Report. This report shows PTD and YTD invoiced sales tax information by branch and schedule number. If you post to the General Ledger from the Invoiced Sales Tax Report by individual schedule, you will have to perform a PTD reset regardless of whether you accumulate figures quarterly or monthly. If you post by individual schedule and you do not perform a PTD reset monthly, the Accounts Receivable autobatch will not be balanced. END OF YEAR PROCEDURES 1. Process all invoices for the year. 2. Print the Sales Tax Summary. 3. Activate Q-Mode. Set the Invoiced Sales Tax Report Reset parameter to YTD. If you perform a YTD reset, you do not need to perform a PTD reset. For more information on the reset parameter, refer to page Print the Invoiced Sales Tax Report. 32

33 7 HOW DO I... Know that I have used the correct sales tax schedule number for each invoice? Caution! To know if you have used the correct Sales Tax Schedule number for each invoice, you must first understand where the sales tax schedule number originates. The Sales Tax Schedule number can come from the following three areas of the system: 1. The Location Maintenance screen (accessible from the Company Information menu) has a State Tax Schedule field and an Other Tax Schedule field. These fields allow you to enter state tax schedule information and other tax schedule information for each of your sales locations. If you enter a figure other than 0 (zero) into either of these fields, the system will use the tax schedules specified in these fields when state and other tax is applied during order entry or invoicing If you set default state and other tax schedules for each location in the Company module, these values will override the tax schedules in the customer record. If you want to set a default for both tax schedules, you must set both of these defaults either in the Company module or in the customer record. You cannot set a default for one tax schedule in one module, and a default for the other tax schedule in the other module. 2. The Customer Alternate Ship-To Maintenance screen has a Sales Tax Schedule # field. If you use an alternate ship-to address at order entry, the system uses the number in this field. 3. The Ship Info screen (accessible from the Order Header screen in Order Entry) has a State Tax Schedule field and an Other Tax Schedule field. If you enter a figure other than 0 (zero) in either of these fields, the system will use the tax schedules specified in these fields when state and other tax is applied during order entry. The system can use a sales tax schedule number from several different places; it is necessary to understand the importance of each of these fields. Regardless of where the system accesses the sales tax schedule number, the system will use the sales tax schedule number that prints on the order during invoicing. The number that prints on the order during invoicing is the same sales tax schedule number that the system will use to calculate the tax amount and to update the sales tax reports. Ensure that the totals on my sales tax reports are accurate? The figures on the sales tax reports come from directly from the figures on the sales tax schedules. Only the person responsible for maintaining the sales tax schedules should have access to these schedules. Make sure you set up security that allows only this person to access the sales tax schedules. If you edit a customer record to display a new sales tax schedule number, you must also edit existing orders for this customer. Simply editing the customer record does not carry over to existing orders. These orders will be invoiced with the old schedule number if you do not edit them. 33

34 7 HOW DO I... In addition, make sure you have completed all invoicing for the month before you run the sales tax reports. Perform the period-to-date reset after you have printed your reports and before you begin any invoicing for the next month. Print an invoice that will not print due to invalid tax schedule? To print an invoice that will not print due to invalid tax schedule, edit the sales tax schedule number on the customer order. This schedule number must be a valid sales tax schedule number. You will not be able to print this invoice until one day after you have edited the customer order. When the system tried to print the invoice, it flagged the order with the invalid tax schedule message. The system will not attempt to print this invoice again until the next day, even if you request to print the full range of invoices. Remember to check the source of the invalid schedule number. Make sure to correct the source of the problem. This way, subsequent orders will not use the same invalid number. In addition, you will need to check other existing orders for this customer to ensure the sales tax schedule number is accurate. Charge tax to my customers for waste disposal and include this tax on the invoice? Prophet 21 offers a Waste Disposal Tax on Line-Items feature through the Direct Software Catalog. The feature allows you to charge a waste disposal tax and prints the total in place of telephone charges on invoices. The waste disposal tax amount displays by branch on both the daily and monthly invoice registers. This amount will not display on the Invoiced Sales Tax Report or the Sales Tax Summary. Report on sales tax other than through the sales tax module? PQL allows you to access the sales tax information so you can design your own report. The system retrieves this information from the sales tax schedule, which is updated from the schedule number on the customer order when invoices are printed. Prophet 21 offers a Sales Tax Journal feature through the Direct Software Catalog. This feature journalizes invoices by sales tax schedule. A sales tax journal automatically prints as part of the daily and monthly invoice register. The journal includes totals for each state sales tax schedule. Charge sales tax only? To bill a customer for sales tax only, you must enter a customer return into the system. You must generate a customer return because the order entry screen does not provide a field in which to enter a sales tax amount. For more information on this procedure, refer to page 36. Issue a credit for sales tax only? To credit a customer for sales tax only, you must enter a credit order into the system. For more information on this procedure, refer to page 39. Set up a sales tax exemption matrix? The Sales Tax Exemption company option must be enabled to set up a sales tax exemption matrix. For an exemption matrix to be effective, State Tax and Other Tax in Customer Maintenance must be set to Some. To set up a sales tax exemption matrix, you must add a new matrix in sales tax matrix maintenance. For more information on this procedure, refer to page

35 7 HOW DO I... Reset the Invoiced Sales Tax report? It is important that you print the Sales Tax Summary report before resetting. Reset clears the PTD information on both the Invoiced Sales Tax Report and the Sales Tax Summary. You have the option to reset PTD or YTD information when you print the Invoiced Sales Tax report. For more information on this procedure, refer to page

36 8 PROCEDURES CHARGING ONLY To bill a customer for sales tax only, you must enter a customer return into the system. You must generate a customer return because the order entry screen does not provide a field in which to enter a sales tax amount. Proceed with the following steps to generate a sales tax invoice. Read all of the instructions carefully before proceeding. 1. In the Front Counter module, choose the option, Returns. 2. Enter the customer code of the customer to whom you want to charge the sales tax. Complete the fields in the Order Header screen. 3. In the Order Header screen, choose the Ship Info option. This will display the shipping information fields. 4. Verify that the appropriate sales tax schedule numbers are in the State Tax and Other Tax fields. 5. In the State Tax and Other Tax fields, enter the tax amounts. These amounts should be entered as a negative value. 6. At the Return to Stock prompt, select N. 7. At the Credit for DS prompt, select N. 8. At the Nonstock Items prompt, select ITEM. 9. In the Order-Item Entry screen, enter a nonstock item and description to describe the credit. For example, one option is to define the Item Code as Sales Tax. You could use the description line to indicate the invoice number on which you are charging the sales tax. For more efficient processing, one option is to create a catalog item for the sales tax charges. In this way, the Item, Desc, Vendor, UT Price, and UT Cost fields would fill in automatically, and you would not have to manually enter the information. 10. In the Vendor field, enter your own company or a miscellaneous vendor code or vendor number. 11. In the Q-Ord field, enter 1 (one). 36

37 8 PROCEDURES 12. In the UT Price and UT Cost fields, enter At the Create a Stock Item prompt, enter [N]. 14. From the Editing Options menu, choose the option Accept order. 15. From the Print Options menu, choose the option Print an invoice ticket at the front counter, and select a printer. Once printed, the sales tax debit will appear in Receivables. 16. In the Sales Tax module, choose the option Sales Tax Maintenance. 17. Enter the appropriate branch and sales tax schedule number in the Br# and Schd# fields. 18. In the PTD Taxable Sales and YTD Taxable Sales fields, add the total sales of the nontaxable items. For example, if the nontaxable items were sold for a total of $100.00, add $ to each of the two fields. Add the total sales of the nontaxable items to the Taxable Sales fields. 19. If billing for other tax, repeat steps for the other tax schedule. Note: For security reasons, some users choose not edit the Taxable Sales fields as directed in Step 18. In this instance, both the PTD Tax Sales and YTD Tax Sales fields can be derived at the end of a period by reversing the tax calculation. You can reverse the tax calculation with one of two formulas. 37

38 8 PROCEDURES Taxable Sales + Taxable Freight = Tax Charged / Tax Percent Taxable Sales = (Tax Charged / Tax Percent) - Taxable Freight or 38

39 8 PROCEDURES ISSUING A CREDIT FOR ONLY To credit a customer for sales tax only, you must enter a credit order into the system. Proceed with the following steps to generate a sales tax credit invoice. Read all of the instructions carefully before proceeding. 1. In the Front Counter module, choose the option, Returns. 2. Enter the customer code of the customer to whom you want to credit the sales tax. Complete the fields in the Order Header screen. 3. In the Order Header screen, choose the Ship Info option. This will display the shipping information fields. 4. Verify that the appropriate sales tax schedule numbers are in the State Tax and Other Tax fields. 5. In the State Tax and Other Tax fields, enter the tax amounts. 6. At the Return to Stock prompt, select N. 7. At the Credit for DS prompt, select N. 8. At the Nonstock Items prompt, select ITEM. 9. In the Order-Item Entry screen, enter a nonstock item and description to describe the credit. For example, one option is to define the Item Code as Sales Tax Credit. You could use the description line to indicate the invoice number on which you are crediting the sales tax. For more efficient processing, one option is to create a catalog item for the sales tax credit. In this way, the Item, Desc, Vendor, UT Price, and UT Cost fields would fill in automatically, and you would not have to manually enter the information. 10. In the Vendor field, enter your own company or a miscellaneous vendor code or vendor number. 11. In the Q-Ord field, enter 1 (one). 12. In the UT Price and UT Cost fields, enter At the Create a Stock Item prompt, enter [N]. 14. From the Editing Options menu, choose the option Accept order. 39

40 8 PROCEDURES 15. From the Print Options menu, choose the option Print an invoice ticket at the front counter, and select a printer. Once printed, the sales tax credit will appear in Receivables. 16. In the Sales Tax module, choose the option Sales Tax Maintenance. 17. Enter the appropriate branch and sales tax schedule number in the Br# and Schd# fields. 18. In the PTD Taxable Sales and YTD Taxable Sales fields, subtract the total sales of the nontaxable items. For example, if the nontaxable items were sold for a total of $100.00, subtract $ from each of the two fields. Subtract the total sales of the nontaxable items to the Taxable Sales fields. 19. If crediting for other tax, repeat steps for the other tax schedule. Note: For security reasons, some users choose not edit the taxable sale fields as directed in Step 18. In this instance, both the PTD Tax Sales and YTD Tax Sales fields can be derived at the end of a period by reversing the tax calculation. You can reverse the tax calculation with one of two formulas. Taxable Sales + Taxable Freight = Tax Charged / Tax Percent Taxable Sales = (Tax Charged / Tax Percent) - Taxable Freight or 40

41 8 PROCEDURES SETTING UP A EXEMPTION MATRIX 1. Access the Sales Tax module. 2. Select the Exemption Matrices option from the Sales Tax Information menu. 3. Select the Matrix Maintenance option from the Exemption Matrices menu. 4. Press [Insert] to add a new matrix. 5. Enter the branch number, the schedule number, and the exemption number. Note: You will need the exemption number for Step Press [F2] to accept this matrix. 7. Access the Item module. 8. Select the Item Maintenance option from the Item Information menu. 9. Enter the item code for the item that is tax exempt. If necessary, press [F3] to access the item browse. 10. Press [Ctrl][E] to access the edit mode. 11. Insert the exemption number you entered in the exemption number field in Step Press [F2] to accept these changes. Note: For an exemption matrix to be effective, State Tax and Other Tax in Customer Maintenance must be set to Some. 41

42 8 PROCEDURES SET SCHEDULE BY SHIP-TO ZIP CODE COMPANY Sales tax schedules can be based on the ship-to zip code. When the Sales Tax by Ship-To Zip Code company option is enabled, tax percentages on orders are automatically calculated based on the ship-to zip code. A new Company Order Processing Option, Sales Tax by Ship-To Zip Code, has been created to have sales tax schedules be based on a customer s ship-to zip code. 1. To set the company option, choose Options from the main menu of the Company module, and then select Company Options from the Options menu: 2. Select the Order Processing options and either scroll or use key resolution (typing the beginning letters of the option s name) to display the Sales Tax by Ship-To Zip Code option: 42

43 8 PROCEDURES 3. After highlighting the option and pressing [Enter], the Sales Tax by Ship-To Zip screen is displayed: Sales Tax by Ship-To Zip Code... determines whether sales tax schedules based on ship-to zip codes are used. N Sales tax schedules based on ship-to zip codes are not used. This is the default value. Y Sales tax schedules using ship-to zip codes are used during order entry. When Y is entered in this field, a Sales Tax by Zip Code Maintenance option appears on the main menu of the Sales Tax module. For more information on company options, refer to the Company Set Up manual. 1. To set up sales tax schedules based on ship-to zip codes, select the Sales Tax/Zip Maintenance option shown on the Sales Tax main menu: 43