Entering Tax Code Information (Area-Based)

Use these general steps to set up tax code information in the system.

In the Tax Systems form:
Specify Tax System 1.
Select Tax Mode Area.
Specify a default tax code only in Customer/Vendor Tax Code.
Open the Tax Parameters form.
Make sure Prompt for [Tax System (1)] is selected.
In the Tax Codes form, enter all the tax codes you will use. State, county, city, and local taxes should be entered with Tax Code Type set to Rate. You should also have one tax code set up as Exempt.
In the Address Tax Code Defaults form, set up default tax codes by location for new customer and vendor records.
On the Customer Ship-Tos form, for each customer specify a tax code that was set up in Step 7 with a Tax Code Type of Rate.
On the Vendors form, for each vendor specify a tax code that was set up in Step 7 with a Tax Code Type of Rate.
Open the Items form Sales tab. For each item that is taxable, the Tax Code field should be blank. If an item is not taxable, enter an exempt tax code in the Tax Code field.
To test the tax system setup, open the Customer Orders form and enter an order. For total order taxing, check the information in the Tax Info tab. The tax should be filled in the Tax Code field, and freight and miscellaneous should be blank, even if they are taxable.
Print the Order Verification report. Verify the tax amount on this report before proceeding.

Tax amounts will be placed on the Customer Orders form's Amounts tab when shipping occurs. The Assess on Return and Deductible fields on the Tax Codes form are only active for vouchers.
This information is not stored separately in the tax records. Do not change the flags mid-period, since this will cause the report to change. If you want a change, enter a new tax code with the desired values.
You cannot delete a tax code if it is used in the Customers, Customer Orders, or Estimates forms.