Creating Tax Codes - U.S. Nexus
Before you set up a tax code, you must first set up a vendor record for each taxing agency. To do this, go to Lists > Relationships > Vendors > New. On the Info subtab, select Tax agency in the Category field.
To create a U.S. tax code:
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Go to Setup > Accounting > Taxes > Tax Codes > New.
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Click the nexus for which you want to create a tax code.
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In the Tax Name field, enter a name to identify this tax code.
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In the Display Name/Code, enter a unique name or number that you want to use for this tax code in addition to the tax name.
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In the Description field, enter the text that you want to appear on invoices or receipts that use this tax code.
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In the Rate field, enter the appropriate tax rate as a percentage (such as 3.5% ).
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In the Tax Type field, select the tax type for the tax code you are creating.
The tax control account for this tax type is selected by default.
For more information about tax types, see Tax Types Overview.
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In the Tax Agency field, select the tax agency that this tax is paid to. If the tax agency does is not available in the dropdown list, create a tax agency. Default tax agencies are automatically set up when a subsidiary or nexus is created, but you must edit the tax agency vendor record to provide details. To create a tax agency vendor record, see Setting Up Tax Agencies as Vendors.
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A default tax control account is shown in the Tax Account field. You can select a different tax control account.
You can create tax control accounts at Setup > Accounting > Taxes > Tax Control Accounts.
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The following fields are used to determine the sales tax to charge when you enter orders for your customers and when customers order from your web store:
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In the County field, enter the name of the county where this tax applies.
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In the City field, enter the name of the city where this tax applies.
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In the State field, select the state where this tax applies.
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In the Zip Codes field, enter the zip codes where this tax applies.
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Click Save.
Now, you can either use this tax code to calculate tax for orders, or you add this tax code to a tax group.
For more information about tax codes, see Managing Tax Codes.