1 Point of Sale and Order Entry: Special Topics Taxes Overview CounterPoint uses two distinct types of sales taxes: ticket taxes and line item taxes. Ticket tax refers to the tax for an entire document (a Point of Sale ticket or an Order Entry order). This document explains how sales taxes are determined in CounterPoint. The information that controls tax calculation is set up in Inventory, Point of Sale, and Customers. Actual taxes are calculated in Point of Sale and Order Entry. Default ticket tax In Point of Sale and Order Entry, the default tax rate (percent) and associated G/L account number is determined by the default customer tax code specified for the store in Setup / Point of Sale / Stores / Stores. However, if you enter a ticket or order for a customer who has a different tax code assigned to them (in Customers / Customers), this customer s tax code determines the default ticket tax and G/L account number. (See Customer Tax Codes for more information.) Ticket taxes can optionally include tax on any miscellaneous ticket charges. Specify the default customer tax code and G/L account number for each store, using Setup / Point of Sale / Stores / Stores. Specify whether to charge tax on miscellaneous ticket charges, using Setup / Point of Sale / Stores / Configuration options. Taxes by customer CounterPoint allows you to define customer tax codes that can be assigned to individual customers to determine how taxes are calculated for these customers. For example, you might set up a tax code called EXM that specifies tax percentages of zero, and assign this tax code to your tax-exempt customers. Each customer tax code allows you to specify whether to charge tax on miscellaneous ticket charges for specific taxing regions. This setting takes precedence over the setting in the store s configuration option. Setup each customer tax code, using Setup / Customers / Tax codes (See Customer Tax Codes for more information.) Assign customer tax codes to individual customers, using Customers / Customers.
Point of Sale: Special Topics - Taxes 2 Assessing different taxes for different ship-to addresses for the same customer Multiple ship-to addresses can be established for a customer, each with its own tax code. For example, if a customer has ship-to addresses in several states, and you must charge the appropriate state tax for each ship-to address, you can set up a tax code for each state and assign the appropriate code to each ship-to address. NOTE: When you enter an existing ship-to address on a ticket or order, the tax code associated with that ship-to address is used automatically. If a default ship-to address is defined for a customer, the tax code associated with that address is used automatically. Specify in Setup / Point of Sale / Stores / Configuration options for each store whether to use ship-to addresses. Define the appropriate customer tax codes, using Setup / Customers / Tax codes (See Customer Tax Codes for more information.) Define ship-to addresses for the desired customers, and assign the appropriate tax code to each ship-to address (See Defining ship-to addresses in Defining Customers for more information.) Change the ship-to address for a Point of Sale ticket, if necessary, in the Ship to optional entry field (See Optional entry fields in Entering Sale Tickets for more information.) Change the ship-to address for an Order Entry order, if necessary, in the Ship to field on the order header screen (See Entering Orders for more information.) Changing the ticket tax code An authorized user can change the tax code in effect for a ticket or order, if you have specified to allow ticket tax code changes. (Users authorized to override taxes can change ticket tax codes and line item tax codes, override ticket taxes, and change both line item and ticket taxable status.) NOTE: The ticket tax code can only be changed if there are no line item taxes on the ticket. Specify in Setup / Point of Sale / Stores / Configuration options for each store whether to allow ticket tax code changes. Specify which users are authorized to override taxes, using Setup / System / Users.
Point of Sale: Special Topics - Taxes 3 Change the current ticket tax in Point of Sale, if necessary, in the Tax code optional entry field (See Optional entry fields in Entering Sale Tickets for more information.) Change the current order tax in Order Entry, if necessary, in the Tax code field on the order header screen (See Entering Orders for more information.) Overriding the ticket tax An authorized user can manually override the tax amount of the ticket or order. (Users authorized to override taxes can change ticket tax codes, override ticket taxes, and change both line item and ticket taxable status.) Specify which users are authorized to override taxes, using Setup / System / Users. During Point of Sale ticket entry, press F2 at Pay code: to access the selection list that allows you to change the tax amount for the ticket (See Changing the ticket tax amount in Additional Ticket Entry Options for more information.) During Order Entry order entry, change the tax amount on the order totals screen (See Entering Orders for more information.) If a tax override is performed, the difference between the system-calculated tax and the amount of the tax override is allocated as follows: Calculate the reduction in the tax amount (the DIFFERENCE). Reduce the ticket tax by the amount of the DIFFERENCE, but not below zero. If any DIFFERENCE remains, proportionately reduce each line item tax (that is not a unit tax ), based on its portion of the total amount of line item taxes. (Don t reduce any line item tax below zero.) If any DIFFERENCE remains, reduce the unit taxes using the proportional method described above. If any DIFFERENCE remains, this remainder is due to rounding. This DIFFERENCE is allocated to the last line item that was updated. If the tax override increases the tax, the DIFFERENCE is allocated to the ticket tax. Making a ticket non-taxable An authorized user can make a Point of Sale ticket non-taxable and enter tax exempt information for the customer. (Users authorized to override taxes can change ticket tax codes, override ticket taxes, and change both line item and ticket taxable status.) (To make an Order Entry order non-taxable, either use a tax code that specifies 0% tax or manually enter a tax of 0.)
Point of Sale: Special Topics - Taxes 4 Specify which users are authorized to override taxes, using Setup / System / Users. During Point of Sale ticket entry, use Alt + N at Item number or Pay code: to alternate this ticket s status between taxable and non-taxable (See Changing the taxable status of an individual line item in Additional Ticket Entry Options for more information.) During Order Entry order entry, change the tax code or the tax amount to create a non-taxable order (See Entering Orders for more information.) You can also automatically make tickets and orders for certain customers tax exempt by defining a customer tax code that specifies zero taxes and assigning this tax code to the appropriate customers. Tickets marked as non-taxable using Alt + N in Point of Sale are reported on the Daily Exception report. Tickets that are non-taxable because of a customer tax code are not included on this report. Regardless of which method you use to make the ticket non-taxable, sales are reported as taxable if the item is taxable. Sale and taxable amounts are tracked by tax code. When you use a customer tax code to make tickets non-taxable, you can use monthly history to view and report on your non-taxable sales. Item taxable status You can define each item as normally taxable or normally non-taxable. No tax is assessed on items that are marked as non-taxable. Specify whether each of your items is taxable, using Inventory / Items. Changing the taxable status of individual line items on a ticket During ticket and order entry, an authorized user can override the tax status of individual line items to make the item taxable or non-taxable, if you allow line item taxable status changes. (Users authorized to override taxes can change ticket tax codes, override ticket taxes, and change both line item and ticket taxable status.) Specify in Setup / Point of Sale / Stores / Configuration options for each store whether to allow item taxable status changes. Specify which users are authorized to override taxes, using Setup / System / Users.
Point of Sale: Special Topics - Taxes 5 Line item taxes In Point of Sale, use Alt + N at Qty (Color/size for gridded items) to change the taxable status of the current line item (See Changing the ticket tax amount in Additional Ticket Entry Options for more information.) In Order Entry, press F5 at Price to change the taxable status of the current line item (See Entering Orders for more information.) Each item can be assigned an item tax code that specifies any line item tax. Line item taxes can be assessed in addition to or in place of the ticket or order tax, and the line item tax may itself be taxable. Item tax codes also allow you to limit the total amount of tax assessed for individual line items. CounterPoint supports unit taxes as well. Unit taxes are tax amounts charged per piece, instead of a percent of the selling price. A unit tax is useful for bottle deposits and similar charges. When an item with an item tax code assigned to it is entered on a ticket, the tax for that item is automatically determined by the item tax code. Users authorized to override taxes can change line item tax codes. Set up each item tax code, using Setup / Inventory / Tax codes (See Item Tax Codes for more information.) Assign item tax codes to individual items, using Inventory / Items. Special tax situations Customer tax codes can be combined with item tax codes to handle special tax situations. For example, assume you do business in two states that have different sales tax rules: State A: 5% tax on merchandise, 5% tax on labor State B: 6% tax on merchandise, no tax on labor
Point of Sale: Special Topics - Taxes 6 Define two customer tax codes (using Setup / Customers / Tax codes) similar to these:
Point of Sale: Special Topics - Taxes 7 Define an item tax code (using Setup / Inventory / Tax codes) similar to this: Assign the item tax code LAB to all of your labor items, using Inventory / Items. Reporting taxes Certain end of day reports contain daily tax information. If you retain ticket history, the Ticket History Report provides historical sales and tax information for individual tickets. If you retain management history, the Tax History report provides summary historical tax information (useful for determining sales tax collected). Specify in Setup / Point of Sale / Stores / Stores whether to include item detail (including all line item taxes) on the Daily Register Audit (See Daily Register Audit in Stores for more information.) Specify in Setup / Point of Sale / Stores / Stores whether to print the Changed Tax Tickets section of the Daily Exception report (See Daily Exception report in Stores for more information.) Specify in Setup / Point of Sale / Control whether to retain management history (See Point of Sale Control for more information.) Taxes on discounted tickets and orders When a ticket or order is discounted (by entering a discount, a percentage or a package price), the ticket or order tax is recalculated based on the discounted taxable amount for the ticket. The total of all line item taxes (excluding any unit taxes ) is discounted by the same factor as the ticket or order taxable amount. Any taxes due to miscellaneous charges and/or unit taxes are unchanged (not discounted). If any line item taxes use maximum taxable amounts, the maximum is not used during recalculation. In other words, the maximum is only taken into account when the line item is entered or edited.
Point of Sale: Special Topics - Taxes 8 Tax distributions Ticket and order taxes are recalculated when end of day posting is performed to determine the distributions to make for the ticket or order tax code. WARNING: If a tax percentage for the tax code has changed since the ticket or order was originally entered, the tax is recalculated during posting using the new percentage, and distributions to G/L will be out of balance. To avoid out of balance tax distributions, don t change a tax code definition if there are any unposted tickets or orders. Rounding for tax tables You can select which rounding method to use for customers associated with each tax code in Setup / Customer / Tax codes and for items associated with each tax code in Setup / Inventory / Tax codes. For each tax code, choose Normal to round calculations up/down to the nearest cent, or Increase to next cent to always increase the tax to the next cent (i.e., $0.072 rounds up to $0.08). Choose Increase to next cent to increase only if the tax is above a particular cutoff amount. For example, you can round up to the next cent only if that tax is greater than $0.01 (to prevent tax amounts of $0.002 being rounded up to $0.01): For customers you can also select a rounding method of Penny tax table. If a tax code with a penny tax table is applicable to a ticket, sales tax on the whole dollar portion is calculated in the normal manner, but sales tax on the penny portion is derived from the table. For example, for a $4.87 sale, four dollars would be taxed by the applicable tax code s Tax percent 1 value, while sales tax on the 87 cents would be determined by the corresponding penny tax table.