Sales & Use Tax Archives

Preferences – Sales Tax

Introduction

The Sales Tax preferences are where you configure defaults related to sales tax.

Form Access

From the main menu, click Edit | Preferences, or
From the toolbar, click the Preferences button.

Field & Button Definitions

Use Cash Basis Sales Tax Tracking – When enabled, sales tax will track liabilities based on when payment for the transaction is received rather than the accrual sales tax (transaction date).
Pay Sales Tax Default Bank – Select the default bank account to populate on the Pay Sales Tax form when paying sales tax liabilities.
Only Show Sales Tax Groups in Selections – When this preference is enabled, only the sales tax groups will be available in the following tax item drop downs:
- Customer:Jobs Company Preferences
- Customer:Jobs Tax Info Tab
- Estimate/Sale/Invoice/Credit Forms

Sales Tax Liability Adjustment

How to do a Sales Tax Liability Adjustment

This help topic explains how to use the Sales Tax Liability Adjustment form.

Using the Sales Tax Liability Adjustment Form

Each time you sell something, Total Office Manager offers you the chance to add sales tax to the sale. When you do Total Office Manager, keeps track of the sales tax collected and who you owe the money to. This makes it easy to pay the particular tax authority that you owe the money to.

This form allows you to adjust the amount that Total Office Manager feels you owe a specific sales tax vendor. Use this form when you are certain an adjustment is required.

Accessing the Sales Tax Liability Adjustment Form

From the main menu click Customers | Sales Tax | Sales Tax Liability Adjustment.

Fields Definitions

Adjustment Date	Total Office Manager automatically populates this date field with the current date (according to your computer’s clock). You can change it if you need to.
Entry No.	Entry Number. Total Office Manager automatically populates this field with the next available number but you can change it if you need to.
Vendor	Sales Tax Vendor. This refers to the vendor that you owe the sales tax to. This is the entity that you PAY sales tax to. This may be your local state or county government.
Sales Tax	Allows you to select which sales tax to pay.
Adjustment Account	The account (from Chart of Accounts) that will show this adjustment.
Increase Sales Tax By	Check this option if you are trying to INCREASE the amount of sales tax you owe the entity (sales tax vendor) you selected above.
Decrease Sales Tax By	Check this option if you are trying to DECREASE the amount of sales tax you owe the entity (sales tax vendor) you selected above.
Amount	This is the amount of money to increase or decrease what you owe this sales tax vendor.
Memo	This area gives you a place to describe the adjustment or the reason you made it. We highly recommend that you use Total Office Manager’s memo fields.
Buttons
Save	Commits the changes to your sales tax liability and closes the form.
Exit	Closes the form and does NOT change your sales tax liability.

Step-By-Step

Open the Sales Tax Liability Adjustment form as directed above.
Change the Adjustment Date if needed.
Change the Entry Number if needed.
Select a Sales Tax Vendor (taxing authority) that you pay sales tax to and wish to adjust the amount you owe.
Select the Adjustment Account that you wish to reflect the adjustment.
If you wish to increase your sales tax liability, select the “Increase Sales Tax By” option. If you wish to decrease your sales tax liability, select the “Decrease Sales Tax By” option.
Enter your adjustment amount in the Amount field.
Please enter a good descriptive memo here to explain why you felt it was necessary to adjust your sales tax liability.
Click OK to commit your changes.

Tips Related to Paying Sales Tax Liabilities

Accountant’s Note: This form essentially does the same thing as an Adjusting Journal Entry but makes the process simpler for the average user.
You can edit an adjustment by simply going back to the adjustment and changing it.
Total Office Manager should calculate sales tax liabilities correctly. If you notice regular errors, be sure to carefully check how you setup your sales tax. We recommend that you quickly seek qualified help with sales tax setup and management.
Be careful to pay your sales tax in full and on time. The interest and penalties can be significant.

Pay Sales Tax Liability

How to Pay Your Sales Tax Liabilities

This help topic explains how to use the Pay Sales Tax Liability form.

Using the Pay Sales Tax Form

This form allows you to quickly and easily pay the correct sales tax vendor and the correct amount.

How to Open the Pay Sales Tax Form

From the main menu click Customers | Sales Tax | Pay Sales Tax.

Field Definitions

Checking Account –	This is the bank account your check will draw from to pay the sales tax bill.
Payment Date –	Check date. Total Office Manager automatically populates this field with the current date but you can change it if needed.
Show Sales Tax From –	Set a date to create a date range to show how much sales tax was collected for that data range.
Pay –	Check this check box to indicate which sales tax liabilities you wish to pay.
Sales Tax Item –	Indicated what sales tax item you are paying.
Payable To –	Refers to the sales tax authority (agency or vendor) that you owe the money to and wish to pay.
Amount –	The amount of sales tax that you have collected and now need to pass on (pay) to the sales tax authority.
Amnt. to Pay –	Amount to Pay. The amount of sales tax you are paying.
Totals –	Displays the total of the columns above.
Button Definitions
Select All –	Selects each and every sales tax liability and marks it for payment.
Deselect All –	Deselects all sales tax liabilities that may have been marked for payment.
Create Checks –	Creates checks made out to the proper authorities in the proper amount and closes the form. You still must go to Write Checks to actually assign a starting check number and print them.
Exit –	Closes the form.

Step-By-Step to Paying Your Sales Tax

Open the Sales Tax Liability Adjustment form as directed above.
Change the Check Date if needed.
Adjust the Show Sales Tax Through date as needed to display the correct date range.
Mark which Sales Tax Liabilities you wish to pay by clicking on this field.
Click OK to commit your changes.
Open the Write Checks form (under Banking) to actually print the checks you have just created.

Tips

If you need to adjust the amount of sales tax you owe, use the Sales Tax Liability Adjustment form. Please see the link below.
Total Office Manager should calculate sales tax liabilities correctly. If you notice regular errors, be sure to carefully check how you setup your sales tax. We recommend that you quickly seek qualified help with sales tax setup and management.
Be careful to pay your sales tax in full and on time. The interest and penalties can be significant.
You don’t charge sales tax, you collect it. You don’t really pay sales tax, you just pass it on to the correct tax authority. Your company is basically just a tax collection agency for your local tax authorities.

Sales Tax Code

Understanding and Using Sales Tax Codes

The Sales Tax Code form is used to create a tax code that will indicate whether or not to calculate sales tax for the tax item selected. They are also used to organize your sales tax liability. When printing certain reports, you can see your tax liability by sales tax code. Sales tax codes might be thought of as a “tax category” that also includes a switch to calculate sales tax or not.

Sales tax codes may be set on the Customer:Job form and or the Invoice Item form. They can be overridden when creating invoices and estimates.

Default Sales Tax Codes

Two tax codes are automatically created in Total Office Manager: TAX (taxable) and NON (non-taxable). TAX is used for items and customers that you need to collect tax for. NON is used for items and customers that are exempted from tax such as non-profit organizations, out-of-state sales, or items that your customers will resell.

When you select the “Non” tax code, no sales tax is calculated. This is true even if you have a sales tax item selected.

Users can delete sales tax codes. If you do not have these two, you may need to reenter them. You may enter as many as you need.

Sales Tax Code Form Access

From the menu option Customers | Sales Tax | Sales Tax Code List, right-click anywhere on the list and choose New Tax Code from the pop-up menu.
From a Tax Code drop-down, you may choose <Add New>. Tax Code selections may be found in the following locations:
- Customer:Jobs Company Preferences
- Items Company Preferences
- Customer:Jobs Tax Info Tab
- Items Accounting Tab
- Estimate/Sales/Invoice/Credit Forms

Field & Button Definitions

Sales Tax Code – The Sales Tax Code field is used to enter an abbreviation for the sales tax code. Common usage includes TAX for taxable sales, NON for nontaxable sales, CHU for church organizations, GOV for government agencies, LBR for labor only items, EXE for exempt sales, etc. This entry may be up to a three-character abbreviation to define and classify a tax code.
Description – A short explanation of the code. This field may be up to twenty (20) characters in length.
Apply Sales Tax To This Tax Code – When this option is checked, the tax code will calculate sales tax for the tax item selected. When the option is not checked, the tax code is considered non-taxable.
Inactive – Check this option to inactivate the sales tax code.
OK – This button saves the information and closes the form.
Cancel – This button closes the form without saving.
Next – This button will save the current tax code and start a new blank form for entry.

Tips

In Total Office Manager, the Tax Code on an Invoice Item supersedes the Tax Code set on an Estimate/Invoice/Sale/Credit. This is the correct functionality. If the Customer Tax Code is to always be the primary, users are to set the preference for this behavior under Edit | Preferences | Sales/Invoices/Estimates | Company Preferences | Customer:Job Tax Code will Override the Item’s Tax Code Selection.
We usually recommend NOT setting a Tax Code in the items unless the item is never to be taxed. An example: Labor is not taxable unless it is fabrication labor. When the tax code is blank on the item and placed on an invoice with a customer that is taxable, the customer tax code will populate. When the item tax code is marked as non-taxable and placed on a customer that is taxable, the item is not taxed. In the instance the preference is set to override with the Customer:Job Tax Code, the non-taxable item will then be taxed.

Sales Tax Code List

Introduction

The Sales Tax Code List is used to review, manage, and edit sales tax codes.

A sales tax code simply answers the yes/no question of whether or not sales tax applies on a sale. The simplest of sales tax code setups would perhaps only include two codes — one for tax (TAX) and one for non-tax (NON).

At some point, however, you may be audited by state sales tax officials who will want to know why tax was not charged on any given transaction. This is why it can be important to setup more than one non-tax item, each one indicating why tax was not charged. For instance, a non-tax code of CHU might be setup to indicate tax was not charged because the customer was a church. Another example of a non-tax code might be LBR to indicate tax was not charged on a particular line item because it was labor (a common scenario in many states).

If your organization does work in more than one state, you might want to setup a taxable tax code for each one, for tracking and reporting purposes. For example, service companies near Aptora’s headquarters probably perform work in both Kansas and Missouri, so they probably have taxable tax codes KS and MO setup in their system. Both of these tax codes would answer “Yes” to the taxable question, but they would also help in reporting the use of those codes.

Form Access

From the main menu, click Customers | Sales Tax | Sales Tax Code List.

Usage

The easiest way to access a command available in the list is via the right click menu. You can also get to these commands under the Tax Code List menu option in the upper left corner of the form.

To create a new tax code, right click anywhere in the list and choose New Tax Code from the pop-up menu.
To edit a tax code, right-click on it and choose Edit Tax Code from the pop-up menu. You may also double click on the item to edit the tax code.
To delete a tax code, right-click on it and choose Delete Tax Code from the pop-up menu.
To inactivate a tax code, right-click on it and choose Make Tax Code Inactive from the pop-up menu.
To export whatever information is currently displayed in the list, right-click anywhere in the list and choose Export List from the pop-up menu. You may also export the list directly to MS Excel by choosing the Open List in MS Excel option.

Field & Button Definitions

Sales Tax Code – The Sales Tax Code field is used to enter an abbreviation for the sales tax code. Common usage includes TAX for taxable sales, NON for nontaxable sales, CHU for church organizations, GOV for government agencies, LBR for labor only items, EXE for exempt sales, etc. This entry may be up to a three-character abbreviation to define and classify a tax codes.
Description – A short explanation of the code. This field may be up to twenty (20) characters in length.
Apply Sales Tax To This Tax Code – When this option is checked, the tax code will calculate sales tax for the tax item selected. When the option is not checked, the tax code is considered nontaxable.
Inactive – Check this option to inactivate the sales tax code.
OK – This button saves the information and closes the form.
Cancel – This button closes the form without saving.
Next – This button will save the current tax code and start a new blank form for entry.

Sales Tax Item Groups (adding and editing)

How to Add and Update Sales Tax Item Groups

This help topic explains how to add, edit, delete, or inactivate Sales Tax Item Groups. Sales tax groups are two or more sales tax items grouped together.

The Tax Item Group form deals with sales tax that you are collecting from customers, not paying to vendors. This sales tax is then passed on to sales tax authorities. When you set up a Tax Items Group, Total Office Manager keeps track of what you owe, when it’s due, and who to pay.

Even though you may be charging your customers a combination of local taxes and a state tax, they may be used to seeing only one sales tax line and rate on sales forms. A tax group lets you track each tax separately yet show only the total sales tax on your sales forms.

Note: Every state has a different tax structure for their state, county, and municipality. Check with your own state and local sales tax agencies to find out their rules. Your state may have already combined all your taxes into one tax amount.

Sales Tax Group Example

Lets say you state has all your taxes in a neat little bundle for you, no problem right? Wrong! What if a special tax or a levy tax was imposed for 1%, for duration of two years? Everyone must be charged the 1%. Set up a Tax Item Group and you won’t have to worry if you remembered to charge the special tax. At the end of the two years inactive the Tax Group and go back to normal. Remember to set the special tax or levy up as a tax item first, and then you can make a group.

When you use a Tax Group on a sales form, Total Office Manager calculates each tax individually, then adds the individual taxes together to get the total tax.

Usage

Once your individual sales tax rate items are setup, you can create Sales Tax Group Item when creating invoices. In other words, you will use a tax item on your sales forms to calculate the sales tax on a sale or to identify non-taxable items. A Tax Item Group represents two or more taxes that you collect at a specified rate and pay to a single agency.

If you collect sales tax at more than one rate, or if you pay sales tax to more than one agency, then you must set up a separate tax item for each tax you collect for each agency. If you sell to out-of-state customers, then set up an out-of-state sales tax item that will help you to identify different rates for different locations.

If you charge your customers a combination of taxes, you’ll want to set up tax groups.

Note: If you are not required to collect sales tax, you don’t need to set up tax Items Groups.

Form Access

From the main menu, click Customer | Sales Tax | Create Sales Tax Group.

Note: Sales Tax Items and Sales Tax Groups are listed in the Items List. Note that items are not just things you sell, but also may include such things as sub totals, discounts, adjustments, credit items, and more.

Field Definitions

Tax Name	Enter the name of the tax. Example: Group KS Special Levy Tax.
Description	Enter a description of the tax. Example:. Special levy tax for restoration.
Tax Item	Select the two or more Tax Items that will make up your Tax Group.
Total Group Tax Rate	This will show the total amount of the taxes that will be applied to your customer’s sales form. Double check this total to make sure your have selected the correct percentages to be deducted.
OK	To save.
Next	To save and create a new tax item group.

Step-By-Step

Open the form and Sort or Filter the list if desired.
If you wish to create a new sales tax item, click on the Item button (lower left hand corner of the list), and select New Sales Tax Item from the menu.
If you wish to delete a sales tax entry, click on the Item button (lower left hand corner of the list), and select Delete Item from the menu.
If you wish to Edit a sales tax item, click on the Item button (lower left hand corner of the list), and select Edit Item from the menu.
If you wish to inactivate a sales tax item, select that Sales Tax Item click on the Make Item Inactive.

Tips

We generally recommend that you avoid deleting sales tax items. You should use the inactivate option instead.
Group iteLearn about Aptora’s Sales Tax Item Groups and simplify your sales tax management. Ensure compliance, accuracy, and efficiency.ms whose individual items all have percentage-based rates will not calculate correctly when used as line items on sales forms. To avoid incorrect sales tax charges, Total Office Manager makes these items unavailable in the drop-down list in the item column of sales forms such as invoices, estimates, and sales receipts.
If you need to provide your customer with the separate tax items and rates included in a sales tax group, you can enter each sales tax item of the group as a separate line on the sales form.
For each different sales tax agency you pay, you must have vendor on your vendor list.
For each single tax you collect and pay, you need a sales tax item on your item list.
For each combination rate you collect, you need a sales tax group on your item list.
A sales tax group includes two or more single taxes set up as sales tax item. The rate for the group is the total of the rates for the items in the group. Group tax items allow Total Office Manager to track and report taxes separately, but display them as one combined amount to customers.
If your most common sales tax is a combination, be sure that the sales tax group item is shown as the most common sales tax in the sales tax preferences. Then new customers and new sales will automatically have the combination rate.

Sales Tax Related Content

Sales Tax Items

Sales Tax Item List

Sales Tax Codes List

Sales Tax – Pay Liability

Sales Tax – Liability Adjustment

Sales Tax Items (creating and managing)

How to Set Up and Manage Sales Tax Items

The Add Sales Tax Item form is used to setup the sales tax collected from customers (not paid to vendors). The sales tax you collect is later passed on to sales tax authorities using the Pay Sales Tax form. Total Office Manager keeps track of the amount of sales tax withheld, when it’s due, and who to pay.

If you collect sales tax at more than one rate, setup a separate sales tax item for each rate.
If you pay sales tax to more than one agency, setup a separate tax item for each agency.
If you sell to out-of-state customers, setup separate out-of-state sales tax items to identify different rates for different locations.
If you collect a combination of taxes from your customers, you’ll want to set up Sales Tax Item Groups, which are comprised of the sales tax items described here.
If you are not required to collect sales tax, you don’t need to set up sales tax items.

IMPORTANT: Every state has a different tax structure for their state, county, and municipality. Check with your own state and local sales tax agencies to find out their rules.

Form Access

From the main menu, click Customers | Sales Tax | Create Sales Tax Item.

Field Definitions

Basic Fields

Tax Name – Enter the name of the tax. Example: “KS Sales Tax” or “Hill County Sales Tax”, etc.
Description – Enter a description of the tax. Example: “Kansas State Sales Tax”.
Tax Rate – Enter the tax rate provided by the tax agency.
Tax Agency – Enter the name of the agency to whom your taxes are payable. Select from the drop-down arrow if you have already set them up as a vendor or create the agency as a new vendor.

Tax Burden Fields

Paid by Customer – This is the typical scenario whereby the tax burden is paid by the customer.
Paid by Company – Often called a “Use Tax”, this setting indicates that the tax is paid by your organization. In this scenario, an account is selected from your chart of accounts, to track the expense.
Expense Account – Used in conjunction with the “Paid by Company” tax burden setting, this field is used to select which account to use to track Use Tax expenses.

Calculate Tax Setting

The Calculate Tax field is used to select one of three possible settings: Your accounting and tax professional should be able to offer advice on which setting is appropriate for your organization.

Based on Retail Price – Taxed using the price you CHARGE (retail price). This is the most common choice for typical sales tax.
Based on Direct Cost – Taxed using the price you PAY (wholesale price or direct cost). This is common when you track use tax.
Based on Gross Profit – Taxed using the gross profit (retail price less what you paid for it). Be sure to check with a tax professional.

Other Controls

OK – The OK button saves and closes the form.
Cancel – The Cancel button closes the form without saving any changes.
Next – The Next button performs like the OK button, but also opens a new blank form ready to be filled in.
Alias – The Alias button opens the Item Alias form for the sales tax item. See the topic Item Alias for more information on item aliases.
Inactive – Ticking the Inactivate checkbox make the sales tax item inactive.

Sales Tax Tips

IMPORTANT: Sales Tax Rate Change Advice: If sales tax rates have increase, it is highly recommended that you inactivate the sales tax item that contains the old rate and then create a new sales tax item with the new rate. You will use the new item for now on. For clarity, you should also include the sales tax rate in your description. This makes it easier to go back and see how sales tax was calculated after the rates have changed several times.
The same warning as above also applies to changing vendors. If for some reason the vendor changes, create a new sales tax item an inactivate the old one.

Sales Tax Item List

Introduction

The Sales Tax Item List is used to manage sales tax items and sales tax groups. Sales tax items are the simply the individual components which makeup a sales tax group. For example, a state tax and a local tax are sales tax items which together may comprise a sales tax group.

Form Access

From the main menu, click Customers | Sales Tax | Sales Tax List.

Usage

Perhaps the easiest way of using the commands available in the list is via the right click menu.

To create a new sales tax item, right-click anywhere in the list and choose New Sales Tax Item from the pop-up menu.
To create a new sales tax group, right-click anywhere in the list and choose New Sales Tax Group from the pop-up menu. Note: Items must setup before groups.
To edit an item, right-click on it and choose Edit Item from the pop-up menu.
To delete an item, right-click on it and choose Delete Item from the pop-up menu.
To inactivate an item, right-click on it and choose Make Item Inactive from the pop-up menu.
To open the history of an item, right-click on it and choose History from the pop-up menu. It’s History form will open. This form displays credit, check, and discount information for review.
To export whatever information is currently displayed in the list, right-click anywhere in the list and choose Export List from the pop-up menu.
To modify which columns are displayed in the list, right-click anywhere in the list and choose Form Preferences | Show Columns from the pop-up menu.

Sales & Use Tax

Introduction

Form Access

Field & Button Definitions

Related Topics

How to do a Sales Tax Liability Adjustment

Using the Sales Tax Liability Adjustment Form

Accessing the Sales Tax Liability Adjustment Form

Fields Definitions

Buttons

Step-By-Step

Tips Related to Paying Sales Tax Liabilities

Related Content

How to Pay Your Sales Tax Liabilities

Using the Pay Sales Tax Form

How to Open the Pay Sales Tax Form

Field Definitions

Button Definitions

Step-By-Step to Paying Your Sales Tax

Tips

Related Content

Understanding and Using Sales Tax Codes

Default Sales Tax Codes

Sales Tax Code Form Access

Field & Button Definitions

Tips

Related Content

Introduction

Form Access

Usage

Field & Button Definitions

Related Content

How to Add and Update Sales Tax Item Groups

Sales Tax Group Example

Usage

Form Access

Field Definitions

Step-By-Step

Tips

Sales Tax Related Content

How to Set Up and Manage Sales Tax Items

Form Access

Field Definitions

Basic Fields

Tax Burden Fields

Calculate Tax Setting

Other Controls

Sales Tax Tips

Topics Related to Sales Tax

Introduction

Form Access

Usage

Related Content

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COMPANY

SUPPORT

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