Defining tax codes

You must define the appropriate tax codes before you can enter orders with applicable sales taxes. The Tax Codes window in the Advanced Accounting Console is used for defining tax codes.

Do the following to define tax codes:

  1. In the Advanced Accounting Console, go to Settings > Commerce > Set up tables > Tax codes.
  2. Click New.
  3. Enter a Code for the tax. When defining state or province tax codes, use the standard two-character postal abbreviation for the state or province. This allows the Tax Auth field on the Enter and edit orders window to default to the customer's state tax code.
  4. Enter a Title for the tax code.
  5. Enter the percentage Rate you are assigning to the tax code. Make sure to enter the rate as a percentage and not as a decimal. For example, enter 6.0 (not .06) for a tax rate of 6%.
  6. (optional) Enter the GL Account number. If you leave the GL Account field blank, iMIS records the value entered in the Sales Tax field on the AR/Cash Default Accounts window (go to Finance > Options > Configure accounting options, and click Default Accounts).
  7. (optional) Enter any applicable Related Tax.
  8. (optional) Enter the Tax Category. Specifies the tax category related to this Code, for example, Standard, Reduced, Zero Rated. If Tax Category is specified then VAT Country must also be specified.

    9. Note: Tax Category is displayed only if the default organization’s Taxation Method is set to VAT.

  9. (optional) Enter the VAT Country. Specifies the country to which this Code applies. If VAT Country is specified then Tax Category must also be specified.

  10. Note: Only one tax code can exist for each unique Tax Category and VAT Country combination, for example, there is only one tax code which defines the Standard (Tax Category) tax rate for the United Kingdom (VAT Country). When a product or function is marked as Tax based on customer location, the Tax Category of the product and the VAT Country of the customer is used to look up the relevant Tax Code.

    11. Note: VAT Country is displayed only if the default organization’s Taxation Method is set to VAT.

    Note: In the VAT Country field, you can enter the VAT country code and press Tab to quickly enter the country name.

  11. Click Save.