Changes in Tax Table

Post date: Feb 17, 2016 5:22:13 PM

There are some old and new fields on this screen that may need attention:

1) 'Tax rate' - previously, this field was zero unless it was a 'retail sales tax' type.  If it was 'Use' tax, this rate would be set to zero so it wouldn't calculate a tax on invoices.  But now, because the 'SM Sales Invoice Tax Report (1170)' includes the ability to calculate USE tax owed, as well as retail sales tax, you'll want to enter the ACTUAL tax rate, even for 'USE' taxes (i.e., taxes paid on purchase cost).  EXEMPT tax types should still be zero, and retail sales taxes will already have the correct rate - but you'll want to update any 'USE' taxes manually so the tax reports are accurate. (NOTE: If you have a LOT of taxes in your system and want some help setting rates a little more automatically, get in touch with us and we might be able to help with some commands that might save you some manual steps.)

2) 'Calculate on purchase or sale' - 'USE' taxes should be set to calculate on 'Purchase amount', and retail sales taxes (those calculated and shown on a customer's invoice) should be set to 'Selling price'.  NOTE: when the SMCP program updates, it SHOULD set this automatically for you - if any of your current taxes has a rate greater than zero, this will be set to calculate on 'Selling price'.  Any current taxes with a rate of zero will be set to calculate based on 'Purchase amount'.  This happens as part of the SMCP program update.  But after the update, it might be good to review these.

3) 'Calculate on customer invoice' - if checked, this simply means that the tax, however it is calculated, will appear on the customer invoice.  Normally this should be checked for 'Retail sales' taxes, and not checked for 'Use' tax or for 'Exempt' taxes.  This, also, gets set automatically through the SMCP program update, based on whether the tax had a non-zero rate in it previously.  You shouldn't need to update it, but you may want to review them.

4) 'List this tax in Accounts Payable' - if you want this tax to appear in the drop down list when entering vendor's invoices as a possible tax choice, check this box.  If, for example, it's a retail sales tax that is only used on sales orders and customer invoices, you may want to UN check this box so this tax doesn't appear in the AP person's invoice entry screens.  The program update will set this to 'checked' by default and if you want any tax NOT to appear in AP invoice screens, you'll have to uncheck it yourself.

5) 'List this tax in Order Entry' - if you want this tax to appear in the drop down list on sales order headers, this should be checked.  Normally, all the current taxes you have should appear in order entry and so the update turns this on (checks the box) by default.

NOTE: these changes shouldn't affect anything anyone sees or does in Order Entry - they'll see the same list and use it in the same way.  Also when entering PO invoices, the tax drop downs will work exactly the same way as they did before.

There are also underlying changes in the data structure of customers, sales invoices, sales orders, and a few other places.  The invoices, for example, will now carry every detail about the tax used to calculate, so that at any time afterwards you can list the tax amounts owed and collected in the 'SM Sales Invoice Tax Report (1170)'.  After the program is updated, you can run a command to update all the older, historical invoices so that the tax report can be run for past periods.  Contact us to get that command and let us help you with it.  THIS ISN'T NECESSARY UNLESS YOU WANT TO PRINT THE 'SM Sales Invoice Tax Report (1170)' for existing invoices - new ones will get the tax data for that report as they are created.

This query will list all of your taxes and their settings, for your review:

select

 lid as 'ID'

, staxjurisdiction as 'JURISDICTION'

, staxtype as 'TYPE'

, itaxtype as 'TAX TYPE ID'

, bdtaxrate as 'RATE'

, sdescription as 'FULL DESCRIPTION'

, sglacct as 'GL ACCT'

, IF(iactive = 0, 'N',  'Y') AS 'ACTIVE?'

, IF (icalculateonpurchaseorsale = 0, 'Purchase', 'Sale') AS 'CALCULATE ON'

, IF(icalculatetaxoncustomerinvoice = 0, 'N', 'Y') AS 'SHOW ON<BR>CUSTOMER INVOICE?'

, IF (ishowinorderentry = 0, 'N', 'Y') as 'SHOW IN<BR>ORDER ENTRY'

, IF (ishowinaccountspayable = 0, 'N', 'Y') AS 'SHOW IN AP'

 FROM tax ORDER BY staxjurisdiction, staxtype

So, here's the 'TO DO' list, after you update your program:

1) Run the query to review your taxes, and then in the 'SM Edit Taxes (1021)' function, set any 'USE' (purchase) tax rates to their correct values if they were previously set to zero.  Also review the other settings for each tax, just to make sure they are how you want them.  (If you have a lot of taxes, let us help with some commands).

2) Run the command to update all your old invoices with the appropriate tax data so that you can use the 'SM Sales Invoice Tax Report (1170)' for any historical periods.  (New invoices will get the right tax data starting now.)