Settings: Tax Rules

Settings: Tax Locations: Tax Rules

Tax Rules:  This property dictates how Studio Designer interacts with the Tax Percent properties within 'Tax Location' settings.  When creating a new 'Tax Location', please select the one that applies to your situation as recommended by your bookkeeper.

Settings:  Tax Locations:  Tax Rule

1. Tax Percent 1:  This is the default rule, and simply taxes at the 'Tax Rate 1' setting.
2. Selling TP1 Mark Up TP2:  This rule is used for locations that tax goods and markup at two different rates.
   Example:  The selling cost is taxed at 8%, the markup will be taxed at 4.365% and anything taxed through Time Billing/Activities will be 4.365%.
   Therefore set:
   'Tax Percent 1' = 8.0%
   'Tax Percent 2' = 4.365%
   'Time Tax Percent' = 4.365%
3. US Florida Luxury 5000:  This rule is currently used for Florida for areas subject to the Luxury Tax.
   Example: It will tax the first $5,000.00 at 7% (Tax Percent 1 +Tax Percent 2) and anything over $5,000.00 will be taxed at 6%,which is Tax Percent 1.
   Therefore set:
   'Tax Percent 1' = 6.0%
   'Tax Percent 2' = 1.0%
   Time Billing/Activities will not be taxed.
4. US Nashville:  This rule is currently used for Nashville TN.
   Example:  It will tax all taxable sales at 7% (Tax Percent 1) and will add an additional 2.25% (Tax Percent 2) to amounts from 0-1,600.00 and additional 2.75% (Tax Percent 3) to amount from 1,600-3,200. 
   Therefore set:
   'Tax Percent 1' = 7.0%
   'Tax Percent 2' = 2.25%
   'Tax Percent 3' = 2.75%
   Time Billing/Activities will not be taxed.
5. US Phoenix: This rule is currently used for the City of Phoenix, AZ.
   Example: It will tax the first $11,631.00 at 8.6% (Tax Percent 1 +Tax Percent 2) and anything over $11,631.00 will be taxed at 8.3%,which is Tax Percent 1.
   Therefore set:
   'Tax Percent 1' = 8.3%
   'Tax Percent 2' = 0.3%
   Time Billing/Activities will not be taxed.
6. Canadian Sales Tax:  This rule is currently used for provinces in Canada that are subject to both PST and GST.
   -It will tax all taxable items at Tax Percent 1+Tax Percent 2.
   -Tax 1 is titled "GST"
   -Tax 2 is titled "PST"
   -Activities will be taxed at Time Tax Percent.
   -Purchase sales tax will be calculated automatically but can be edited at the time the item is created if preferred.
7. Canadian H:  This rule taxes using Tax 1 only and titles sales tax as HST.
8. British VAT:  This rule is exactly like the Tax Rule "Tax Percent 1" where it taxes amounts by Tax Percent 1.
   -  The only difference is that it prints "VAT" instead of "Sales Tax" on Proposals and Invoices.
   -  Purchase sales tax will be calculated automatically but can be edited at the time the item is created if preferred.
9. Australian GST:  This rule is exactly like the Tax Rule "Canadian H" but it prints "GST" instead of "Sales Tax" on Proposals and Invoices.

   Australia (non cash basis) requires that you pay GST at the earlier of:

   1. The date the invoice is issued.

   2. The date the first payment is received.  (This would mean the deposit).

   To accommodate this you will need to create the invoice at the time the deposit is received and invoice for any additional costs separately.

Record Tax Paid to Vendors:

See 'Record Tax Paid to Vendors'

Unit of Measure:

The tax rate(s) used is based on unit cost by default.  If you will sell a set as one item, the item(s) should be entered with a quantity of 1, with the description telling the buyer that this is a set.  (Of course, this depends on how your taxing authority defines a single item, the examples below are for demonstration purposes only).

See 'Unit of Measure' for details.  Check the 'Tax as One Item' option in order to keep the true quantity correct, while taxing as one.

For example, 2 dining chairs @ $5,500.00 each could be potentially be taxed two different ways:

Example1

Custom Dining Chair

Quantity  = 2

Selling Cost + Markup = $5,500.00 each

Sales tax =  $760.00

This is $380.00 each ($5,000.00*7% + $500.00 * 6%)

Example 2

Pair of Custom Dining Chairs

Quantity = 1

Selling Cost + Markup (Total Unit Cost) = $11,000.00

Sales tax = $710.00 ($5,000.00*7% + $6,000.00 * 6%)