Tax Items are the separate local, state, and/or federal agencies for collecting sales tax. Creating and updating tax items will be important for accurately reflecting the business tax structure. Knowing how and when to update tax items minimizes any potential errors and keeps your business up to date with changing regulations and business needs. Tax items are combined together to create tax groups. Customers are assigned a tax group for their location and taxes are applied based on tax groups. For more information on tax groups, please see Tax Groups.
Table of Contents
- Creating a New Tax Item
- Cloning a Tax Item
- Filtering the Tax Item List
- Setting Tax Items Inactive or Reactivate
- Exporting Tax Item(s)
Navigate to Settings / Accounting / Tax Items.
Creating a New Tax Item
1. Click on the Green Plus icon.
2. Input for Tax Item Details.
Note: Fields marked with a red asterisk are required fields.
a. Tax Item Name - The name should identify the tax agency. This will create a cooresponding liability account in the chart of accounts under Tax. For information on Chart of Accounts, please see Managing Chart of Accounts.
Note: The tax item list is sorted alphabetically so consider this in organization for naming convention.
b. Tax Rate - The rate of tax for this agency.
c. Name on Documents - This is the name that customers will see on estimates and invoices when required in some jurisdictions, such as, Canada where individual agency name and tax rates are required to be listed.
3. Input Tax Agency as needed.
Note: Tax agency information is not visible to customers, it is optional as a reference for accountants.
a. Municipality Name - The specific tax agency.
b. Account Number - The sales tax liability account.
4. Input Associated Tax Groups - Taxes can be grouped and assigned a group name. For more information on tax groups, please see Tax Groups.
Note: Customers are assigned a tax group for their location and taxes are applied based on tax groups.
a. Associated Tax Group - The tax group for this item.
Example: Combining Utah State Tax, Salt Lake County Tax, and Salt Lake City Tax for a Tax Group.
5. Click Save.
Cloning a Tax Item
1. Navigate to Settings / Accounting / Tax Items.
2. Select the tax item to be cloned.
3. Click on the Ellipsis on the right.
4. Select Clone. An exact copy of the tax item will open.
5. Change Tax Item Details.
Note: Fields marked with a red asterisk are required fields.
a. Tax Item Name - The name should identify the tax agency. This will create a cooresponding liability account in the chart of accounts under Tax. For information on Chart of Accounts, please see Managing Chart of Accounts.
Note: The tax item list is sorted alphabetically so consider this in organization for naming convention.
b. Tax Rate - The rate of tax for this agency.
c. Name on Documents - This is the name that customers will see on estimates and invoices when required in some jurisdictions, such as, Canada where individual agency name and tax rates are required to be listed.
6. Change Tax Agency as needed.
Note: Tax agency information is not visible to customers, it is optional as a reference for accountants.
a. Municipality Name - The specific tax agency.
b. Account Number - The sales tax liability account.
7. Change Associated Tax Groups - Tax items are grouped and assigned a group name. For more information on tax groups, please see Tax Groups.
Note: Customers are assigned a tax group for their location and taxes are applied based on tax groups.
a. Associated Tax Group - The tax group for this item.
Example: Combining Utah State Tax, Salt Lake County Tax, and Salt Lake City Tax for a Tax Group.
Note: Changes will auto save.
Filtering the Tax Item List
1. Navigate to Settings / Accounting / Tax Items.
2. Click on the Filter icon on the right.
3. Filter Options will open.
a. Name - Enter a keyword to search.
b. Include Inactive - All inactive codes will be listed in italic.
Note: Learn how to set tax items to inactive, reactivate or delete in this article.
c. Clear Unpinned - This will clear all unpinned filters.
Note: See step 4 below to learn how to pin a filter.
d. Clear All - All filters will be cleared.
Note: See step 4 for viewing a filter list.
4. When a filter is setup through filter options, it will show in this list.
a. Pin - Click the pin icon on a filter to pin a filter. This will keep this filter option even if you move off this screen.
Note: Click on the pin icon again to remove the pin.
b. Unpinned Filter - Keyword search filter.
c. Click Clear Unpinned or x on the filter to remove a filter.
Note: Inactive codes will be italic.
Setting Tax Items Inactive or Reactivate
1. Navigate to Settings / Accounting / Tax Items.
2. To set inactive, select the tax item that needs to be marked inactive.
3. Click on the Ellipsis on the right.
4. Select Set Inactive.
5. To make multiple tax items inactive, go to the Tax Item screen.
6. Check the tax item(s) in the list to set inactive.
7. Select Set Inactive.
8. To reactivate a tax item, click on the Filter icon.
9. Filter Options will open, check Include Inactive.
10. Select the code to reactivate.
11. Go to the Ellipsis on the right.
12. Click on Set Active.
Exporting Tax Item(s)
1. Navigate to Settings / Accounting / Tax Items.
2. Check the tax item(s) in the list to be exported.
3. Select Export.
4. A csv file will be downloaded.
