Sales Tax codes are assigned to transactions in order to calculate tax on sales and purchases, invoices and expenses. Tax codes may be assigned to customers, vendors and warehouses as default values for transactions, and can be changed on sales and purchase orders. You can open the list of Sales Taxes from the Edit menu.

Tax Code – The unique code of up to 4 digits for this tax jurisdiction.

Description – Description of the tax that appears in grid columns wherever tax codes can be assigned to records or transactions.

Short Name – Name that shows as the field label on sales orders, purchase orders, and accounts receivable and accounts payable transactions.

Integrated sales tax provider – Enable this option if you want the tax code to be connected to Avalara Sales Tax integration. See Integrations – Avalara Sales Tax in the manual for more details.

Rate – The percentage rate to charge for this tax.

Use Partial Tax Rate – Enable if this tax can be charged partially for some transactions. For example, use this setting if this tax is a combination of two different tax jurisdictions and in some cases the transaction can be tax exempt for one jurisdiction.

Partial Rate – The percentage to charge if a partial rate is allowed here and determined to be required on the transaction.

GL Account – The Ledger account this tax is posted to for customer transactions in Sales and Accounts Receivable. You cannot leave this account blank.

GL Credit Account – Add a Ledger account if this tax will be used for input tax credits, usually for countries that have Value Added Tax (VAT) or GST/HST in Canada, where the tax paid by companies is recoverable against the tax that is collected from customers. Vendor transactions for Purchases and Accounts Payable use this account. This field is not editable if the setting to ‘Include in PO landed costs and AP expenses’ is enabled.

Registration No – Enter your company tax registration value, such as for GST or HST.

Apply to freight – Include freight charges in the tax base used for calculating the tax amount for sales orders, and Vendor Freight charges from the footer for purchase orders.

Apply to surcharge – Include surcharges in the tax base used for calculating the tax amount for sales orders, as setup in Company Settings/Sales Orders/Surcharges.

Include in PO landed costs and AP expenses – Enable to include the tax amount from vendor purchase order invoices with the item cost, posting to the inventory Ledger account and increasing the item’s average cost. This setting also includes the tax amount from accounts payable invoices with the expense Ledger account. Disable for tax amounts to be posted separately to the specified “GL Credit Account” when the tax is recoverable, such as for a Value Added Tax, or HST in Canada.

Communication – Add any number of notes related to this tax, for information, instructions or for storing file attachments.

User Defined – User defined fields can be added to track and/or print information not already included, and can be displayed as columns on the list grid.

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