Tax Names


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Tax Names

Use Tax Names window to define all of the tax names that you will need to create your tax formulas to distribute your taxes and rebates to the appropriate expense and tax authority accounts.

The various tax names that you must define are:

Group Tax Name - represents the bundle of taxes required to process the sales taxes levied on an item line. The rate must equal the sum of the Distribution Tax Rates defined as Sales Type for each Tax Code.

Suggestion: Try establishing a naming convention for the Group Tax Name to help identify the purpose of the group name. For example, if the tax group is PST self-assessed for Saskatchewan and GST applies, the name might be GST/SKPST-SA.

Distribution Tax Name - is a place holder for either a Base Tax rule or a Rebate Tax rule. Here you need to set up all the sales and use taxes that will be used in you formula. Note: A Distribution Tax Name may also be a Rebate Tax Name.

Rebate Tax Name - is used on Rebate Tax rule lines and references the exact Base Tax rule in the current Group Tax of the same name.

Base Tax Name - represents the original sales tax charged and is usually referenced when rebates apply.

Suggestion: To help simplify identification and tracking, use unique Tax Names when you create your Distribution Tax Rule.

Example: Tax names required for basic GST/PST with a rebate for the GST only.

Tax Name
Tax Type
Rate
Accounting Flexfield Suggested Setting
Comment
GST
Sales
7
Generally set to an Expense account
Federal tax - Goods and Services Tax. Full GST is debited to this expense
ONPST
Sales
8
Generally set to an Expense account
Provincial tax - Ontario Sales Tax. Normally charged back to the original expense item. Note: The rate should be the effective rate, such as Quebec 6.955%.
GST Receivable
Sales
0
Generally set to an Receivable account
GST is collected in this account for submission to tax authority
GST Offset
Sales
0
Generally set to the same Expense account as the GST.
This account will offset the GST and be the same amount as the GST Receivable
GST/ONPST
Sales
15
Generally set to an Expense account
This would be the combined effective rate, such as GST & Quebec Sales Tax 13.955%

Attention: If you set up a tax formula that handles self-assessed taxes, the combined rate for the Group Tax Name should only equal the sales tax rates that are in the formula. For example, the use tax rate should not be included in the combined effective rate. See Multiple Tax Distribution Formula for more information.

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Tax Name	Tax Type	Rate	Accounting Flexfield Suggested Setting	Comment
GST	Sales	7	Generally set to an Expense account	Federal tax - Goods and Services Tax. Full GST is debited to this expense
ONPST	Sales	8	Generally set to an Expense account	Provincial tax - Ontario Sales Tax. Normally charged back to the original expense item. Note: The rate should be the effective rate, such as Quebec 6.955%.
GST Receivable	Sales	0	Generally set to an Receivable account	GST is collected in this account for submission to tax authority
GST Offset	Sales	0	Generally set to the same Expense account as the GST.	This account will offset the GST and be the same amount as the GST Receivable
GST/ONPST	Sales	15	Generally set to an Expense account	This would be the combined effective rate, such as GST & Quebec Sales Tax 13.955%