Sales Tax Liability

By |2021-07-22T14:24:37-05:00March 23rd, 2018|Comments Off on Sales Tax Liability

Introduction

The Sales Tax Liability report shows the amount of sales tax generated in a particular time-frame.

The sales tax is reported independently for each sales tax authority (vendor).  For each vendor, the appropriate sales tax items are listed (ie: state sales tax item, county sales tax item).  For each sales tax item, the total sales related to that item is displayed along with the non-taxable amount and the taxable amount which makes up that total.  The current tax rate for each sales tax item is displayed along with the amount of tax actually collected, to determine the sales tax liability amount due.  Subtotals for the non-taxable amount, taxable amount, tax collected, and amount due appear for each sales tax item.  These subtotals are taken together to report their aggregate grand totals at the bottom of the report.

Report Field Definitions

Sales Tax Item

This is the Sales Tax Item(s) added to the invoice or sale.

Sales Amount by Item

This refers to the totals sales of all Sales and Invoices that included this Sales Tax Item. This amount will be duplicated for each Sales Tax Item on the invoice. In other words, if there were two Sales Tax items, the Total will be shown twice. This will make it look like the report total is twice as much as it should be. This number may not necessarily equal total sales for the invoice or the year. It will not match the Income Statement.

Non Taxable Sales

This is the total amount, associated with this Sales Tax Item that was not subject to tax. This amount may not look correct due to the same reasons above.

Taxable Amount

This is the total amount, associated with this Sales Tax Item that was subject to tax (taxable). In other words, line items that included a Tax Item and a taxable Tax Code.

Current Tax Rate

This is the Tax Rate set in the Tax Item form. This is actually the current tax rate. It is possible to change this rate during the year. If you try to perform a manual calculation using this report, it may not look correct.

In out extensive testing this week, we have identified a rare situation that might cause this number (on this report only) to be incorrect as compared to what the tax rate actually is set to in the Sales Tax Item form. However, the tax is being calculated correctly. ONLY the report is affected. This is being addressed and has no affect on collected and paying taxes properly.

Tax Collected

The amount of money collected, per Sales Tax Item, from all invoices and sales. Our tests indicate this number is being calculated properly.

Amount Due

The amount of Sales Tax Collected less the amount you have already paid to the selected Sales Tax Authority. Our tests indicate this number is being calculated properly.

Challenges with This Report

  • Total Office Manager allows you to calculate sales tax based on three things: Retail Price, Direct Cost, and Gross Profit Margin. This makes reading the report very confusing – unless you always use the Retail Price Method. You use a combination of Retail Price and Direct Cost. This makes creating an easy-to-read report very challenging.
  • If the Direct Cost method is used, you are relying heavily on correct inventory control and\or entering the correct Direct Cost accurately on the Invoice or Sale. If there is no Direct Cost, there will be no tax collected. If the Direct Cost is not 100% correct, the Sales Tax Collected will be wrong. This method makes cross checking report very difficult.
  • The Sales Amount by Item column makes it seem like this is the total sales for the Sales Tax Item. The sales can be displayed incorrectly because we duplicate the sales total for each Tax Item used on the invoice or sale.

This report shows Sales Tax Liabilities for a specified Date Range.

Options

  1. The ability to choose a date range using the choices provided or to customize which dates you would like to view

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About the Author:

HVAC Electrical Plumbing Software

Aptora delivers a true All-In-One services software solution including CRM, accounting, payroll, inventory, vendors, sales, marketing, dispatch, flat rate pricing, and more. NO 3rd party plugins or integrations required. Created by contractors for contractors, we know what it takes to grow your services-based businesses.

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