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Tax Rebates

You can use the Rebate Tax Names window to define one or more rebate rates and tax accounts assigned to each Tax Credit Name for a Rebate Tax Name for example, categories for Recreation or Entertainment.

The same Rebate Tax Name, such as GST, can be assigned to more than one Tax Credit Name that will use the same MTD formula.

Note: The Tax Names and formulas are not shared across organizations.

You must use a different Tax Credit Name which is associated with a unique range of values.

For example, an invoice is processed with two item lines that have two different accounting flexfields that each point to a different Tax Credit Name. The same Group Tax Name, however, is on both lines. The MTD formula creates the correct tax lines and apportions out the calculated values to the rebate and tax accounts that are defined in the setup.

Note: You must assign the Segment Ranges to the Tax Credit Name before you use the Rebate Tax Names window.

To populate the Tax Credit Name field, use the Query Find command and the list of values to view the QuickCodes that are available. If you previously defined a Tax Credit Name and you need to update or add a Rebate Tax Name, do the regular Query Enter/Run.

The Rebate Tax Name displays the Tax Names from the Define Tax Names window. Enter the rebate percent that your company is entitled to. The rate will be used in the MTD formula as follows:

GST = 7%
Recreational Rebate = 60%
Chlorine = $100

Base Tax Name Rate * Rebate Tax Name Rate * Item Amount = Rebate Amount

[.07 * .60] * $100 = $4.20

The Tax Number lets you assign more than one rebate rate via the Rebate Tax Name in the Multiple Tax Distribution window. Entering a value such as 1, 2, etc. lets you differentiate which tax rebate rate to use. This rate is important for handling rebates in MUSH sector where rebates and ITCs need to be apportioned out to different accounts.

For example, a municipality qualifies for 100% return on their GST for swimming costs through an ITC and rebate. The municipality have worked their statistics and found that 69% of the registrants are over 65 which qualifies as an ITC. The other 31% will qualify as a rebate.

The Tax Name and Number are used in conjunction with each other as the key to define the required rebate. For the last example, the Tax Name and Number are:

Name
Tax Number
%
ITC
1
69
MUSH
2
31
The last piece of functionality in the Rebate Tax Names window gives you the option to override tax distribution coding by using the Use Item Account check box in the Multiple Tax Distribution window.

If the Use Item Account check box is checked, the tax distribution is generated based on the same account that the item is taxed on. An unchecked check box creates the tax lines based on the account found in the Tax Names window.

If, however, a rebate applies and the Use Item Account check box is not checked, MTD will first search for an account combination in the Rebate Tax Name window, and next searches the Tax Names window for the account combination. MTD stops its search when an account combination is found.

Attention: The list of values for the Tax Credit Name is not available if the Tax Credit Segment Range is not defined.

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