CHAPTER 6: SALES TAX SETUP
Objectives
The objectives are:
• Provide an overview on sales tax • Create Ledger Posting Groups • Create Sales Tax Authorities • Create Sales Tax Settlement Periods • Create Sales Tax Codes
• Create Sales Tax Codes Intervals • Create Sales Tax Groups
• Create Item Sales Tax Groups • Set up Sales tax jurisdictions. • Create Sales Tax Transactions • Create Sales Tax Exempt Data
• Calculate and Post Withholding Sales Tax
Introduction
The requirements for tax calculation and tax reporting differ significantly for different countries. Therefore, the tax module of a true international Enterprise Resource Planning (ERP) system must be comprehensive. In Microsoft Dynamics® AX 2009, the tax module offers many different options for:
• Tax calculation • Posting
• Reporting
Sales Tax Overview
All businesses must collect and pay taxes to various tax authorities. Different countries have different rules and rates. In some countries, the rules differ between states or counties.
This topic provides a general overview on taxes, with the focus on sales taxes, although the tax system in Microsoft Dynamics AX 2009 can process many kinds of taxes and duties.
The sales tax system within Microsoft Dynamics AX 2009 functions as follows: • The user specifies where to post sales taxes by entering a ledger
account in the Ledger posting groups.
• The user specifies the sales tax authorities by using the Sales tax
authorities form.
• The user specifies when and how frequently to settle under sales tax settlement periods.
• The user defines how much to collect or pay as a certain amount or percentage; the user sets this up under the Sales tax codes.
• The system determines whether a sales tax should be imposed on a sale or purchase order through a combination of the Sales tax group and the Item sales tax group.
Sales Tax Overview - Suggested Steps
When you buy an item from a vendor or sell an item to a customer, the system must calculate all the applicable sales taxes.
The calculated sales tax in Microsoft Dynamics AX 2009 is based on the sales tax codes included in both of the tax groups that are attached to the customer or vendor and the item.
Sales Tax Overview- Example
The following table shows the:
• Sales tax setup for a customer and an item • Attached tax groups and the associated tax codes
If you sell the item P Lamp to customer TTL Tire, the system calculates the sales taxes based on tax codes CA and Fed because those codes exist in both groups.
FIGURE 6.2 AFFECT OF SALES TAX CODES ON SALES TAX CALCULATION When you attach settlement period and posting group to the tax codes, you specify how to post and pay the taxes. Finally, you can set up the tax reporting on the sales tax code.
Ledger Posting Groups
The ledger posting groups control the automatic posting of sales taxes in
Microsoft Dynamics AX 2009. You must create the accounts that General Ledger uses in the Chart of Accounts before you can use them to set up the ledger posting groups. The following characteristics apply to ledger posting groups:
• A ledger account is updated automatically when the system calculates taxes and updates invoice posting.
• Because each ledger account can use several tax codes, a ledger posting group determines posting.
• Each ledger posting group can contain several ledger accounts. The description field for that account indicates the way each account is used.
• You can set up ledger accounts that have the posting type Sales tax to select the accounts in the Account group form.
• Changes that you make to the ledger account numbers in Ledger posting groups only affect transactions that have not yet posted.
Ledger Posting Groups - Types of Accounts
The number of accounts you must set up depends on the use of the group and national law. For example, you can set up accounts for:
• Sales-tax payable • Use-tax payable • Settlement account
Procedure: Create Ledger Posting Groups - Overview Tab
Follow these steps to create ledger posting groups:
HINT: Describe the groups so that you can recognize them. This description
appears with the code of the ledger posting group.
4. Select the ledger account in the Sales tax payable list, where you must post the outgoing sales tax as part of the company's revenue. The system debits the outgoing tax in the customer account and then credits this account. Debits automatically are recorded in the account and settled upon payment of the taxes. The ledger accounts available in the Sales tax payable list are the posting type of sales tax on the
Setup tab in the Chart of accounts form. However, if you want to
select other ledger accounts, click According to account type in the
Sales tax payable, Use tax payable or Settlement account lists.
Create Ledger Posting Groups - Posting Example
Here is a brief example about posting sales taxes.
These sales taxes are collected by the company on behalf of the tax authority when you sell taxable goods and services. The amount you receive includes the sales tax.
For example, if a customer makes a purchase of 95.00 USD and the tax amount is 5.00 USD, the ledger transactions are as follows:
Ledger account Debit ($) Credit ($)
Customer account (Accounts Receivable)
100
Sales tax payable* 5
Sales account (domestic)
95
** The sales tax payable line represents the ledger account specified in the Sales
tax payable field on the Ledger posting group form. The system credits this
Procedure: Create Ledger Posting Groups - Sales Tax
Receivable
Follow these steps to create sales tax receivable ledger posting groups:
1. Select the ledger account for incoming taxes (receivable from the tax authority) in the Sales tax receivables list. Vendors collect these taxes on behalf of the tax authority when the company purchases taxable goods and services, and the amount paid to the vendor includes taxes. For example, if a vendor sends an invoice of 100.00 USD, of which 5.00 USD is value-added tax, the ledger transactions are as follows:
Ledger account Debit ($) Credit ($)
Vendor account (Accounts payable)
100 VAT paid (Sales tax
receivable)**
5 Inventory account
(Expense account)
95
2. Enter the ledger account for posting deductible incoming taxes that vendors do not claim or report to the tax authority in the Use-tax
expense list.
NOTE: If the Apply US sales tax and use tax rules check box is selected on the General Ledger Parameters form on the Sales tax tab, the Sales tax payable
field is unavailable. Instead, the system debits sales taxes paid to vendors as expenditures (costs) to the same accounts as the purchases.
Procedure: Create Ledger Posting Groups - Use Tax
Payable
Follow these steps to create use tax payable ledger posting groups:
• U.S. taxes - The amount in this account offsets the taxes posted as expenses if the Apply US sales tax and use tax rules check box is selected on the Parameters form. The vendor is not required to collect the tax. However, the company may still owe taxes to a sales tax authority and must track such taxes.
An example will be shown in the next lesson section.
Create Ledger Posting Groups- Use Tax Payable Example
Here is an example that shows the concept of use tax payable.
A company buys office supplies on the Internet from an out-of-state vendor. The vendor charges 100.00 USD for the supplies and no tax. The company may still owe use taxes to the sales tax authority in its own state. The ledger transactions are as follows:
Ledger account Debit ($) Credit ($)
Vendor account (Accounts Payable)
100
Use tax payable*** 5
Office supplies (Expense account)
105
***This account represents the ledger account specified in this field.
NOTE: This field is visible only when the Apply U.S. sales tax and use tax rules
check box is selected in the General ledger parameters form on the Sales tax tab.
Procedure: Create Ledger Posting Groups Settlement
Follow these steps to create settlement accounts for ledger posting groups: 1. Select the ledger account that the system debits when you pay taxes
in the Settlement account list. To ease use, group the account with other ledger accounts in the Chart of accounts that contain posted taxes. The sum of these accounts is the total balance of taxes due. 2. Perform the following on the General tab:
o Select the ledger account for posting gains on cash discounts in the Vendor cash discount list. You can use this account to view a more accurate audit trail on the transaction.
o Select the account for posting loss on cash discounts in the
Customer cash discount list. You can use this account to view a
The ledger posting groups have the following characteristics: • You can attach them to individual sales tax codes
• They determine the ledger accounts to which the sales taxes calculated for the sales tax code are posted
Test Your Knowledge
Each ledger account can use several tax codes. True or False? ( ) True
( ) False
Changes that you make to the ledger account numbers in ledger posting groups only affect ____.
( ) Posted transactions ( ) Deleted transactions ( ) Not yet posted transactions
( ) Posted transactions from previous months
Before creating ledger posting groups, you must create a(n) _________ in the General Ledger to link to ledger posting group.
Lab 6.1 - Create a Ledger Posting Group
In this lab, you will set up ledger accounts and a ledger posting group for use in posting sales tax transactions.
Scenario
Phyllis is the Accounting Manager for Contoso. Contoso has a new customer in Alabama. A ledger account must be set up to record the sales tax liability and payments made (settlements) to the taxing authority in Alabama automatically. Phyllis asks you to perform these tasks for her.
Challenge Yourself!
• Create an account to record the sales tax payable and the sales tax settlements for the Alabama customer.
• Set up a new ledger posting group to assign to the Alabama customer to automate postings of sales tax transactions.
Need a Little Help?
1. When you create a new account for the sales tax liability for the Alabama customer, use account 220105 in the Chart of Accounts. 2. Create a new ledger posting group for the Alabama customer in the
Ledger posting form that uses the Ledger posting group ALST
(Alabama State Tax).
Step by Step
Set up the ledger account:
1. On the Navigation Pane, click General ledger, then click Chart of
Account details.
2. Press CTRL+N to add a line.
3. In the Ledger account field, enter 220105.
4. In the Account name field, enter Alabama state sales tax payable. 5. In the Search name field, enter ALsales tax pay.
6. In the Account type field, click the arrow to select Balance. 7. Click the Setup tab.
Now, set up the ledger posting group:
1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, click Ledger posting groups, and then click
Overview tab.
2. Press CTRL+N to add a line.
3. In the Ledger posting group field, enter ALST. 4. In the Description field, enter Alabama State Tax.
5. In the Sales tax payable field, click the arrow to select account 220105.
6. In the Settlement account field, click the arrow to select account 220105.
Sales Tax Authorities
Companies pay and report taxes to authorities. The authorities determine when and where the company pays its taxes. Tax authorities can be countries, states, regions, and cities.
You can pay sales tax through a vendor or to the sales tax authority directly. To pay sales tax through a vendor, specify the vendor's account number together with the correct sales tax authority. Sales tax payments are transferred by the system to the vendor making the payment. To make payments to the sales tax authority, enter the sales tax authority's address information.
Procedure: Create a Sales Tax Authority - Overview Tab
Follow these steps to create a sales tax authority:
FIGURE 6.4 AUTHORITY FORM
1. Click General ledger, then click Setup, then click Sales tax, click
Sales tax authorities, and then click the Overview tab.
2. Enter a unique code for the authorities that you send tax declarations and payments in the Authority field. Microsoft Dynamics AX 2009 uses this code throughout the system to refer to a particular authority. 3. Enter the name of the tax authority in the Name field. It displays on
reports and in other areas throughout the system.
NOTE: Give the tax authority a name that easy to identify. The name display
4. Select the vendor to make tax payments to the appropriate authorities in the Vendor account list. The sales tax payments then are posted automatically to the settlement account specified in the Ledger
posting group. When you select a vendor, the vendor's address is
entered automatically. If you leave the field blank, you must pay the tax authorities directly.
5. Select the report layout to print for the tax authority in the Report
layout list.
Procedure: Create a Sales Tax Authority - General Tab
Follow these steps to create a sales tax authority, for fields on the General tab: 1. Select the rounding form to use for rounding the sales tax amount on
the General tab in the Rounding form list. This feature is available only for the German and standard sales tax reports. The following rounding forms are available:
o Normal - Round up numbers five and higher and round down numbers lower than five to the right of the specified unit. o Downward - Round down any number to the right of the
specified unit.
o Rounding-up - Round up any number adjacent to the specified unit.
o Own advantage - Round any number to the company's
advantage. When the system settles sales tax, the total sales tax amount rounds automatically according to the setup on the sales tax authority.
2. Specify:
o The general unit for rounding sales tax amounts in the
Round-off field, according to the chosen rounding form.
The ledger accounts to post gains and losses for rounding in the Account gain and Account loss fields.
EXAMPLE: If you select Own advantage, with a Round-off of 0.10, the system
Procedure: Create a Sales Tax Authority- Address and
Contact Tabs
Follow these steps to create a sales tax authority, for fields on the Address and
Contact information tabs:
1. On the Address tab, enter the address of the Sales tax authority. 2. Enter the remaining contact information on the Contact
Information tab of the Sales tax authority.
Create as many sales tax authorities as needed, each with specific address and contact information and report layout. The company can pay sales taxes to the authority directly or through a vendor account created for the sales tax authority. NOTE: If you have not set up the tax authority as a vendor, prepare a manual
payment to the tax authority on the appropriate due date.
Test Your Knowledge
Tax authorities can be ______. (Select all that apply.) ( ) Countries
( ) States ( ) Regions ( ) Cities
Sales tax can be paid by the AX system to _____ ? (Select all that apply.) ( ) A client
( ) An employee ( ) A vendor
Lab 6.2 - Create a Sales Tax Authority
This lab demonstrates how to create a sales tax authority in AX 2009.
Scenario
Phyllis, the Accounting Manager for Contoso, has asked for your assistance in setting up a sales tax authority. Contoso recently started conducting business with a customer in Alabama. A new sales tax authority must be set up to use to report sales taxes to the Alabama authorities.
Challenge Yourself!
Set up the Alabama sales tax authority. Use ALA for the authority name.
Need a Little Help?
1. Click General ledger, then click Setup, then click Sales tax, and then click Sales tax authorities.
2. Create a new sales tax authority. Contoso uses the field value “Normal” for the rounding method and it rounds to the nearest penny.
Step by Step
1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax authorities. 2. Press CTRL+N to add a new line.
3. In the Authority field, enter ALA.
4. In the Name field, enter Alabama Authorities.
5. In the Report layout field, click the arrow to select U.S. report layout.
6. Click the General tab.
7. In the Rounding form field, click the arrow to select Normal. 8. In the Round-off field, enter .01.
Lab 6.3 - Create and Assign a Vendor to the Sales Tax
Authority
To make paying the sales tax authorities more efficient, you can assign a vendor to the authority. This lab shows how to assign a vendor.
Scenario
Phyllis, the Accounting Manager for Contoso, has discovered that assigning a vendor to a sales tax authority has the following advantages:
• She can make payments as a part of the typical payment routines. • When she runs the Sales tax payment periodic job, the amount the
company owes the sales tax authority transfers to the sales tax authority's vendor account.
• During the company's usual payment routine, the payment to the sales tax authority is created automatically with payments to other vendors.
To automate payments to the Alabama sales tax authority, Phyllis has asked you to set the Alabama sales tax authority up as a vendor. Use the following
information for the vendor.
Field Value
Name State of Alabama Search name AL tax
Group 10 Terms of payment M15-Month end + 15
days
Method of payment USAUSD_CHK
Challenge Yourself!
• Create a vendor for Alabama sales tax.
Need a Little Help?
1. When you add a vendor, Microsoft Dynamics AX 2009 can assign the vendor number because of the Accounts Payable setup in Contoso. Ensure that this setup is correct.
2. Assign the new vendor to the sales tax authority for the State of Alabama.
Step by Step
Ensure that the setup is correct for automatic vendor numbering:
1. Click Basic, then click Setup, then click Number sequences, and then click Number sequences.
2. Select the AP_001 number sequence. 3. Click the General tab.
4. Make sure that the Manual check box is not selected. 5. Close the Number sequences form.
Set up the vendor:
1. On the Navigation Pane, click Accounts payable, then click Vendor
details.
2. Press CTRL+N to add a line. In Contoso, because of accounts payable setup, the next available vendor number is assigned automatically.
3. In the Name field, enter State of Alabama. 4. In the Search name field, enter AL tax.
5. In the Group field, click the arrow to select 70- Tax Authorities. 6. Click the Payment tab.
7. In the Term of payment field, use the arrow to select M15. 8. In the Method of payment field, use the arrow to select
USAUSD_CHK. 9. Close the Vendor form. Assign the vendor to the authority:
Sales Tax Settlement Periods
Sales tax settlement periods specify the intervals when the company reports and pays taxes. The company then can determine which sales tax transactions to report to the authorities and which not to report. The system automatically marks the settlement period when it must report the transaction. After it reports to the authorities, the system prints transactions from the current period.
NOTE: If the Include corrections field on the Sales tax tab page in the General
ledger parameters form is selected, Microsoft Dynamics AX 2009 automatically prints all transactions that it must include in previous periods.
Reporting periods depend on the size of the company, laws, and the authorities. Typical periods could be:
• Monthly • Quarterly • Yearly
Procedure: Create Sales Tax Settlement Period - Overview
Tab
Follow these steps to create a sales tax authority:
1. Click General ledger, then click Setup, then click Sales tax, click
Sales tax authorities, and then click the Overview tab.
2. Enter a unique code for the authorities that you send tax declarations and payments in the Authority field. Microsoft Dynamics AX 2009 uses this code throughout the system to refer to a particular authority. 3. Enter the name of the tax authority in the Name field. It displays on
reports and in other areas throughout the system.
NOTE: Give the tax authority a name that easy to identify. The name display
together with the tax authority code.
4. Select the vendor to make tax payments to the appropriate authorities in the Vendor account list. The sales tax payments then are posted automatically to the settlement account specified in the Ledger
posting group. When you select a vendor, the vendor's address is
entered automatically. If you leave the field blank, you must pay the tax authorities directly.
5. Select the report layout to print for the tax authority in the Report
layout list.
Procedure: Create Sales Tax Settlement Periods - Period
Interval
Follow these steps to set up period intervals for the sales tax settlement periods: 1. Click General ledger, then click Setup, click Sales tax, and then
click Sales tax settlement periods.
2. Select the reporting interval in days, months, or years, in the Period
interval list, on the General tab.
3. Enter the length of the settlement period in the Number of units field. Based on how you define the Period interval, the settlement period displays in days, months, or years.
EXAMPLE: If the Period interval is set to Month(s) and the Number of units is
4. To create a new period, click on the Periods tab, and then press
CTRL+N, or click New period.
5. Enter the first day and last day of a period interval in the From date and To date fields. You cannot change an updated period interval. This means that you cannot remove tax transactions from the original period interval. You can correct errors with an offset transaction that is identical to the original transaction, but with the opposite
mathematical sign.
Example: Create Sales Tax Settlement Periods
In the year 2008, Contoso settles its sales taxes every quarter. To create the first period, enter January 1, 2008 in the From date field and March 31, 2008 in the
To date field. To create the other quarters of the year, click New period three
additional times.
FIGURE 6.6 SALES TAX SETTLEMENT PERIODS FORM
CAUTION: The sum of period intervals must cover whole periods so that no tax
transactions fall outside the calculation periods. Period intervals may not overlap.
Inquire about Sales Tax Settlement Periods
The Sales Tax Settlement Periods form contains several methods to inquire on Sales tax transactions:
• View the sales tax payments for a specific sales tax authority by selecting a sales tax authority on the Overview tab and clicking
Sales tax payments. Additionally, view sales tax payments for a
specific period by selecting an interval on the Periods tab and clicking Interval sales tax settlements.
HINT: Click General ledger > Reports > External > Sales tax payments to
print a report about all settled sales taxes.
• View posted sales tax transactions for a specific sales tax authority by selecting a sales tax authority on the Overview tab and clicking
Posted sales tax. This provides an overview of each sales tax
transaction, which is posted in Microsoft Dynamics AX 2009 with a sales tax code. Alternatively, click Sales tax per interval to view posted sales tax transactions for a specific interval.
Use settlement periods to create and manage the periods the company uses to report sales tax.
Test Your Knowledge
You use settlement periods to create and manage the periods the company uses to report sales tax.
( ) True ( ) False
Sales tax settlement periods specify at what intervals the company reports taxes. ( ) True
Lab 6.4 - Setup of Sales Tax Settlements
This lab explains an example of setting up a sales tax settlement period.
Scenario
Ken, the Controller for Contoso, wants April, the accounts payable coordinator, to pay Contoso's Alabama sales tax liability quarterly. The sales tax authorities expect settlement 15 days after the close of the quarter. The sales tax settlement period and deadlines are laid out in the following table:
Settlement period Deadline for reporting
January 1 - March 31 April 15 April 1 - June 30 July 15 July 01 - September 30 October 15
October 1 - December 31 January 15, the following year
April has asked for your assistance in completing the setup for the Alabama sales tax settlement so that April can generate the tax payments automatically.
Challenge Yourself!
Set up the required sales tax settlement for Alabama.
Need a Little Help?
1. Create the Sales tax settlement period.
2. Attach the Terms of payment to the settlement period. 3. Set up the Period length.
4. Create the individual Settlement periods.
Step by Step
Set up the Overview tab:
1. On the Navigation Pane, click General ledger, click Setup, click
Sales tax, and then click Sales tax settlement periods.
2. Press CTRL+N to insert a line.
3. In the Settlement period field, enter AL.
4. In the Description field, enter Alabama Quarterly.
5. In the Authority field, click the arrow to select ALA-Alabama Authorities.
Set up the General tab:
1. Click the General tab.
2. In the Period interval field, use the arrow to select Months. 3. In the Number of units field, enter 3.
Set up the Periods tab:
1. Click the Periods tab.
2. Press CTRL+N to add a line, if needed. 3. In the From date field, enter 01/01/2008. 4. In the To date field, enter 03/31/2008.
5. Click the New period button three additional times to create the remaining quarters.
Sales Tax Codes
The Sales tax code is a central part of the setup. It specifies: • How taxes are calculated
• The value that is used for tax calculation
The sales tax value is very important because no tax is calculated without it. A sales tax code includes information about:
• How the tax is calculated, posted and reported • When the payments are made
• To whom the payments are made You can define the sales tax rate for:
• Various intervals and periods in Values • Limits on sales tax amounts in Limits
Sales Tax Codes - When to Create
Create sales tax codes when you initially set up the system. Update the sales tax codes when you need to make changes to existing taxes or when you add new taxes. Because taxes frequently depend on geographic location, changes to the company's market can result in the need for new sales tax codes.
NOTE: If a company operates in the United States, it is highly recommended
Procedure: Create a Sales Tax Code - Overview
Follow these steps to create a sales tax code:
FIGURE 6.7 SALES TAX CODES FORM
1. Click General ledger, then click Setup, click Sales tax, then click
Sales tax codes, and then click the Overview tab.
2. Press CTRL+N to create a line for the new sales tax code.
3. Enter a unique identifier for the sales tax code in the Sales tax code field. This is the basis for calculation of tax, purchase duty, and packing duty throughout Microsoft Dynamics AX 2009.
4. Enter a meaningful name for the new sales tax code in the Name field. This describes the function of the code and appears on reports and throughout the Microsoft Dynamics AX 2009 system.
NOTE: If a company operates in the United States, set up sales tax jurisdictions
in the Sales tax jurisdiction list.
5. Select the period and the sales tax authority used to calculate the sales tax code in the Settlement period list.
6. Select ledger posting group for a sales tax code in the Ledger
posting group list. The posting group contains information about
Procedure: Create a Sales Tax Code - Calculation options
Follow these steps to set up calculation options when you create a sales tax code: 1. Click General ledger, then click Setup, click Sales tax, then click
Sales tax codes, and then click the Overview tab.
2. Select from the following options in the Origin list:
o Percentage of net amount - Percentage of purchase or sale, excluding any other taxes.
o Percentage of gross amount - Percentage of purchase or sale, including any other taxes. Sales tax calculates as a percentage of the purchase or sale amount. This includes all other taxes or duties.
o Percentage of sales tax - Percentage of another tax. The tax code that this calculation is based on must exist in the system. On the
Calculation tab, set up the specific sales tax code that you based
the current sales tax code on, in the Sales on sales tax field. CAUTION: If the Sales on sales tax field is blank, this indicates that the
amounts include all other taxes.
o Amount per unit - Indicate the unit with a Unit. If the transaction is in another unit, it converts automatically based on Unit conversion in Inventory.
Calculated percentage of the net amount. On the Calculation tab in the Unit list, select the unit to use when taxes are calculated. If the transaction is expressed in another unit, it converts automatically according to the Unit conversion.
NOTE: If the basis for tax is the number of units, this Unit field is mandatory.
Procedure: Create a Sales Tax Code - Additional
Calculation Options
Follow these steps to set up additional calculation options when you create a sales tax code:
1. Click General ledger, then click Setup, click Sales tax, then click
Sales tax codes, and then click the Calculation tab.
2. Click the Values button. Enter the Percentage/Amount in the
Values form. Click Values to set up the sales tax rate. Also refer to
the procedure on how to create sales tax codes intervals. Close the
3. Click the General tab. Select the currency in which tax must be calculated in the Sales tax code form on the General tab in the
Currency list. If the original transaction is in another currency, the
tax converts automatically.
NOTE: Also set up a purchase duty on a sales tax code by selecting the
Purchase duty check box. Users typically use the purchase duty if, for example,
a European company imports goods from a non-European company. Set up the purchase duty in the General ledger > Setup > Posting > Purchase duty form.
4. Select whether a code or the sales tax rate should print with the sales tax specifications in invoice documents by making a selection in the
Print field on the General tab.
5. Define an identifier that specifies the sales tax code on printed invoices in the Print code field, but only if Print code is selected in the Print list. The sales tax code identifier is an alphanumeric string that may include special characters.
Procedure: Create a Sales Tax Code- Rounding and
Report Setup
Follow these steps to set up rounding and reports when you create a sales tax code:
1. Click General ledger, then click Setup, click Sales tax, then click
Sales tax codes, and then click the Calculation tab.
2. Enter the lowest absolute value of a calculated tax on the
Calculation tab in the Round-off field. For example, if taxes should
round off to a unit that is 1/100 of the currency of the tax, enter the value as a decimal (0.01). The Rounding form field indicates the kind of rounding to use. Refer to the following table for rounding on the amount $98,765.435 with different rounding values set up.
Rounding and Report Setup Notes
NOTE: Click General ledger > Reports > Base data > Sales tax codes to print a
report listing all the sales tax codes.
NOTE: In the Parameters form (click General ledger, click Setup, click
Parameters, and then click the Sales tax tab), select the Calculation date type to
determine the date that sales tax calculates. In the Method of calculation list, select whether the sales tax should calculate for each line or the total amount.
Example Setup- Calculation Methods for Sales Tax Codes
Here is an example that shows a sample setup for sales tax codes:
Scenario:
Phyllis is the Accounting Manager at Contoso. Contoso's customer base includes many international customers. To increase the understanding of sales tax, Phyllis is asking your assistance in reviewing the calculation of sales tax by using various options available in Microsoft Dynamics AX 2009.
The following table shows Phyllis's review of setups in Contoso:
Setup 1 - Use percentage of amount Setup 2 - Use percentage of sales tax Rate
Duty 1 Percentage of net amount
Percentage of net amount
10% Duty 2 Percentage of net
amount
Example Setup- Calculation Methods for Sales Tax
Codes- Incomplete Table
How would you apply the information in the table above to determine the effect of each setup on an invoice for 10.00 USD by completing the following table with the provided information?
Setup 1 Setup 2
Rate Formula Calculation Formula Calculation Duty 1 10% Duty 2 20% Gross Amount Sales Tax Calculation 25% Duty + Sales Tax Total Sale
The completed table will be shown in the next lesson section.
Example Setup- Calculation Methods for Sales Tax
Codes- Completed Table
The completed table as shown here:
Setup 1 Setup 2
Test Your Knowledge
A sales tax code includes information about which of the following? (Select all that apply.)
( ) When the payments are made ( ) How the tax is posted
( ) How the tax is calculated
( ) The currency in which the sales tax is calculated
Sales Tax Codes Intervals
Use Microsoft Dynamics AX 2009 to specify:
• The sales tax rates to use in different intervals
• A lower and upper amount limit for sales tax calculations Sales taxes lower than the minimum limit amount are not recorded, and sales taxes over the upper limit amount are set to the upper limit amount automatically. You can attach the limits to specific dates. The sales tax code defines the limits. Changes to minimum and upper limits do not affect sales tax that is already updated and posted.
Procedure: Create Sales Tax Codes Intervals - Effective
Dates
Follow these steps to set up the From date and To date field in sales tax code intervals, both Limits and Values:
1. Click General ledger, then click Setup, then click Sales tax, then click Sales tax codes, and then click Limits OR click General
ledger, then click Setup, then click Sales tax, then click Sales tax codes, and then click Values.
2. Enter the first date the tax limits apply in the From date field.
NOTE: The previous limits are visible because they are not overwritten when
users make changes.
3. Enter the last date the tax limits apply in the To date field. 4. With From date and To date fields, indicate a period that the
calculated tax applies to. The posting date determines when the tax falls outside the given period.
If you have made changes to the limits, close the old period to indicate an ending date in the To date field and create a period with a new starting date in the From
date field. Extend the old period by changing the date in the To date field. You
can change the limits taking effect at a later date.
Procedure: Create Sales Tax Codes Intervals - Minimums
and Maximums
Follow these steps to set up the minimums and maximums in sales tax code intervals in the Limits form:
1. Enter the lower sales tax limit in the Minimum sales tax field. If the tax is lower than this minimum amount, it is reduced to zero
automatically. The amount in this field must be the same currency as the currency specified in the sales tax code.
2. Enter the upper sales tax limit in the Maximum sales tax field. If the tax is more than the amount indicated, it is adjusted automatically to match this amount. The amount in this field must be the same currency as the currency specified in the sales tax code. Follow these steps to set up the field in the Values form:
1. In the Values form, specify a sales tax rate for the different intervals. 2. In the Value field, define the tax percentage, or amount for each unit.
Sales Tax Code Intervals- Values Versus Limits
For a sales tax code, Values define the tax to calculate, on either a percentage or amount per unit, based upon the effective interval dates and the minimum and upper limits. These minimum and upper limits are the minimum and upper sales
amount to which the amount entered in the Value field applies.
For a sales tax code, Limits define the tax to calculate, based upon the effective interval dates and the minimum and maximum sales tax. These minimum and maximum sales tax limits are the minimum and maximum sales tax that will be calculated on the sale, after all tax calculations are performed.
Procedure: Create Sales Tax Codes Intervals - Marginal
Base Options
Follow these steps to set up the marginal base options in sales tax code intervals: 1. In the Sales tax code form on the Calculation tab, select the origin
for the sales tax limits in the Marginal base list. 2. Select from the following options:
o Net amount per line - Value of the line, excluding any other taxes.
o Net amount per unit - Value of the unit, excluding any other taxes. This can involve the unit price specified by using a unit in the Unit field.
o Net amount of invoice balance - The total value for the invoice, excluding any other taxes.
o Gross amount per line - Value of the line. This includes any other taxes. You can include only one tax code with this or the next property in the individual calculation.
o Gross amount per unit - Value of the unit. This includes any other taxes. You can include only one tax code with this or the previous property in the individual calculation.
Procedure: Create Sales Tax Codes Intervals - Method of
Calculation
Follow these steps to set up the method of calculation in sales tax code intervals: 1. Select the origin for the sales tax limits in the Method of
calculation, in the Sales tax code form on the Calculation tab.
2. Select from the following options:
o Whole amount - The sales tax calculates for the whole amount, which the tax rate for the interval that includes the transaction determines.
o Interval - The base is divided into intervals. The part within a given interval is calculated automatically based on the tax rate for that interval.
NOTE: Click the Inquiries button > Included in sales tax groups or Included in item sales tax groups to view or attach sales tax codes to sales tax groups or
item sales tax groups.
Click the Inquiries button > Posted sales tax to display posted sales tax
transactions for a sales tax code and an itemization of each tax. Use this function for inquiries and error detection. In the Sales tax transactions form, click
Test Your Knowledge
Sales taxes over the minimum limit amount automatically are discontinued and sales taxes under the upper limit amount are set to the upper limit amount.
( ) True ( ) False
Task: Specify the origin for the sales tax limits in the Marginal base list. Match the options to the answers.
_____ 1. Net amount for each line _____ 2. Net amount for each unit _____ 3. Net amount of invoice balance
_____ 4. Gross amount for each line _____ 5. Gross amount for each unit _____ 6. Invoice total incl. other sales tax amounts
a. Value of the unit, including any other taxes
b. The total value for the invoice, excluding any other taxes
c. Value of the unit, excluding any other taxes
d. The total value for the invoice, including any other taxes
e. Value of the line, excluding any other taxes
Lab 6.5 - Set Up Sales Tax Codes Intervals
This lab provides practice in setting up sales tax code intervals.
Scenario
Ken, the Controller for Contoso, has received a notification from the State of Florida that as of 07/01/2008, a tiered tax is due on video recorder sales. Ken asks for your assistance in setting up tax codes that comply with the new structure. The notice specifies the following rates:
Minimum limit Maximum limit Tax rate
0.00 50.00 10% 50.01 100.00 9%
100.01 0.00 8%
Challenge Yourself!
• Use sales tax code intervals to structure the AV_FLST tax rate in Microsoft Dynamics AX 2009 for the new rates.
• Microsoft Dynamics AX 2009 will require an ‘ending’ date for the tax. Plan to enter an artificial date of 12/31/2020.
Need a Little Help?
1. Before you add a new line to the Values form, you must enter dates on the existing line. Suggested dates are 1/01/2003 - 6/30/2008. 2. Add the lines to the Values form. All of them will be assigned the
same date range assigned.
Step by Step
Edit the LA-FLST line:
1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax codes.
4. In the From date field, enter 07/01/2008. 5. In the To date field, enter 12/31/2020. 6. In the Minimum limit field, enter 0.00. 7. In the Upper limit field, enter 50.00. 8. In the Value field, enter 10.00. Create the rest of the lines:
1. Press CTRL+N to add a line.
2. Repeat steps 1 through 8 to add the remaining tax intervals to the form.
3. Close the Values form.
Sales Tax Groups
A sales tax group includes all sales tax codes that apply when you trade goods or services with customers and vendors.
In most countries, different tax rules apply when you trade with domestic and foreign customers. The tax rules for foreign trade frequently are split up based on bilateral and multilateral trade agreements. Therefore, you must create tax groups depending on the taxes that may apply for a certain group of customers or
vendors. A careful analysis of the different types of customers and vendors that the company trades with is a good starting point for determining the types of
Sales tax groups needed, and the setup of those Sales tax groups.
Sales Tax Groups - Example Comparison
If your company needs the following tax codes, here is an example of how to apply sales tax codes to a sales tax group:
• VAT (only applies for domestic customers) • Export Tax (only applies for foreign customers) • Environmental duty (applies to all customers) In a table, they appear as follows:
Domestic customers Foreign customers
VAT Yes No
Export Tax No Yes
Environmental Duty
Yes Yes
The two groups of customers (domestic and foreign) do not have identical tax needs. Therefore, you must create two different sales tax groups that reflect the differences:
• Foreign customers: this group would contain the Export Tax and Environmental Duty tax codes
Procedure: Create a Sales Tax Group
Follow these steps to create a sales tax group:
FIGURE 6.9 SALES TAX GROUP FORM
Because the geographic location of the customer or the supplier determines taxes, you usually assign the same Sales tax group to similar trading partners in the system. The correct tax codes used by the system are attached to this Sales tax
group. The Sales tax group then associates with customer information specified
in the Sales tax group field found on the Setup tab in the Customers form. 1. Click General ledger, then click Setup, then click Sales tax, then
click Sales tax groups, and then click the Setup tab.
2. Enter a unique name for the sales tax group in the Sales tax group field.
3. Enter a name that identifies the sales tax group in the Description field.
4. Select Sales tax code in the Sales tax group setup list. If the company is located in a country with sales tax jurisdiction, select the
Sales tax jurisdictions value.
NOTE: If the Sales tax jurisdictions value is selected in the Sales tax group setup list, a new tab called Jurisdictions setup appears.
5. Select the rounding criteria for the sales tax group in the Rounding
Rounding By- Additional Information
The following is additional information on the choices available in the Rounding
by field on the Sales tax group form.
The Rounding by field controls the rounding principle that applies to the taxes of the sales tax group. This field is available if your company configuration includes sales tax jurisdictions.
The two kinds of rounding that you can select that apply to the sales tax group are:
• Sales tax codes – Rounding is according to the sales tax code round-off. You can see the value in the Round-off field on the Calculation tab of the Sales tax codes form.
• Sales tax code combinations - Rounding is according to the sales tax code combination that is attached to each invoice line.
Procedure: Create a Sales Tax Group - Additional Fields
Follow these steps to set up additional fields in Sales tax groups:
1. Click General ledger, then click Setup, then click Sales tax, then click Sales tax groups, and then click the Setup tab.
2. Enter a form of identification to identify a sales tax group based on specific criteria, such as country, state, or county, in the
Country/State and County/Purpose fields. This provides another
method to identify the group.
3. Select the Reverse sales tax on cash discount check box to reverse sales tax on a cash discount on the General tab. States in the United States have different requirements, so you must set up this
information on the sales tax group. When you create a sales tax group, the selection in the Reverse sales tax on cash discount field in Parameters defaults to the field.
5. Select the Use-tax check box to indicate whether the company is responsible for calculating and paying use-tax on the purchase. This is U.S.-specific functionality. If the company is not responsible, the vendor calculates and pays the tax. If the vendor did not charge tax, the system credits the tax to the account shown in the Use-tax
payable field in Ledger posting groups. How the tax is debited
depends on how you configured Parameters in the Use sales tax module for the United States tax system. If the Use-tax option is selected, the tax posts to the same account as the expense. If the tax posts to the account specified in the Use-tax expense field in Ledger
posting groups, there are no deductions for taxes on purchases and
the tax posts together with the expense. The value is entered automatically from the Use-tax field in Sales tax groups, but you can change it if necessary.
Procedure: Create a Sales Tax Group - Attach to
Customer or Vendor
Follow these steps to attach a sales tax group to a customer or vendor:
1. Attach a sales tax group to a customer or vendor on the Setup tab of the Customers form or Vendors form. This is the default sales tax group for transactions that involve the customer. As with all defaults, you can change the sales tax group on individual transactions, if necessary. Additionally, you can attach a default sales tax group to each ledger account for purchases or sales excluding a customer or vendor are posted, for example, the ledger account for office equipment. The default sales tax group appears automatically on transactions for the customer or vendor; however, you can change the sales tax group on individual transactions before you post transactions.
2. Indicate whether the amounts entered in journals include sales tax. For example, if the total invoice amount of EUR 110.00 is entered in the Debit or Credit field in a journal, and this amount includes the sales tax, then Microsoft Dynamics AX 2009 uses this information to calculate the net amount and sales tax amount. In this example, the net amount is EUR 100.00 (110.00/1.10), and the sales tax amount is EUR 10.
3. Specify this information for the system by selecting the Amount
incl. Sales tax check box in the General ledger parameters form
Amount Includes Sales Tax- Additional Information
You can indicate if the amounts entered in journals include sales tax or do not include sales tax. You can specify this information in three different forms:
General ledger, Parameters form – Specify the default setting of lowest priority
regarding the inclusion of sales tax in journal amounts. This is the setting that will apply to amounts on journals if no other information is supplied through a default setting of higher priority or through a manual setting in a line.
General ledger, Journal names form – Specify a default setting that overrides
the default setting on the Parameters form. Lines in journals that are patterned on a specific journal template automatically receive the journal template default setting regarding the inclusion of sales tax in journal amounts, unless you have entered a setting on the journal itself.
Individual Journal forms – Specify a default setting on an individual journal to override the default settings of the Journal names and Parameters forms. The highest priority setting is entered automatically on journal templates, journals, and journal lines as they are created, but you can select or clear the Amount incl. sales tax field at any time.
If you select the Amount incl. sales tax field, you must enter gross amounts in journals. Sales taxes are calculated on the basis of the gross amount and posted to the sales tax account. The net amount is posted to the ledger account entered in the journal.
If you do not select the Amount incl. sales tax field, you must enter net amounts in journals. The net amount is posted to the ledger account entered in the journal. The sales taxes are calculated on the basis of the net amount and are posted automatically.
Test Your Knowledge
When the sales tax groups are created, attach the sales tax group to ______. (Select all that apply.)
Item Sales Tax Groups
Because items generally determine taxes, you must indicate how taxes are calculated for each item. The Item sales tax group includes all the sales tax codes that apply when you sell that item. The Item sales tax group also may include most of the sales tax codes in the system. When you create the Item sales
tax groups, attach the group to Items.
NOTE: This information is in Item sales tax group. The association between
sales tax codes and the item sales tax group is in the Item sales tax group form, on the Setup tab.
Procedure: Create Item Sales Tax Groups
Follow these steps to create item sales tax groups:
FIGURE 6.10 ITEM SALES TAX GROUP FORM
1. Click General ledger, then click Setup, then click Sales tax, and then click Item sales tax groups.
2. Enter a unique name for the item sales tax group in the Item sales
tax group field on the Overview tab, and a description in the Description field. This information appears on reports and in other
areas throughout Microsoft Dynamics AX 2009.
3. Select the sales tax code for an item sales tax group on the Setup tab. For a sales tax code to be valid, you must select it for the sales
Procedure: Set Up a Default Item Sales Tax Group for an
Item
To ensure sales tax calculates on all transactions for a specific item, set up a default item sales tax group for an item. Follow these steps to set up the default:
1. Click Inventory management, then click Items. 2. Select an item on the Overview tab.
3. Select a value in the Item sales tax group lookup field on the
References tab in the Purchase order section. This value is the
default item sales tax group for the selected item when you enter it on a purchase order line.
4. Select a value in the Item sales tax group lookup field in the Sales
order section. This value is the default item sales tax group for the
selected item when you enter it on a sales purchase line.
Set Up a Default Item Sales Tax Group for a Ledger
Account
To ensure sales tax calculates on all journal transactions that you post to ledger accounts:
• Set up a default item sales tax group for all ledger accounts
• Set up default item sales tax groups for particular ledger accounts, if necessary
You can change any default item sales tax group that appears automatically on a journal line as necessary before the transaction posts.
NOTE: In sales journals, purchase journals, and other journals where you enter
an item number, the item sales tax group attached to the item automatically is entered on the journal lines.
Procedure: Set Up a Default Item Sales Tax Group for a
Ledger Account
Follow these steps to set up a default item sales tax group for a particular ledger account:
1. Click General ledger, then click Chart of accounts and select the ledger account.
2. Select the default item sales tax group in the Item sales tax group list on the Setup tab.
Test Your Knowledge
You cannot change any default item sales tax group that appears automatically on a journal line before you post the transaction.
( ) True ( ) False
Sales Tax Jurisdictions
Sales tax jurisdictions can be entered by clicking General ledger, then clicking
Setup, then clicking Sales tax, and then clicking Sales tax jurisdictions.
Use this form to create the sales tax jurisdictions for which the company must collect sales tax. The sales tax jurisdiction functionality is designed for
companies that operate in the United States, but is not a legal requirement. The form is available if an administrator enables the Sales tax jurisdictions configuration key.
A sales tax jurisdiction is a grouping of sales tax codes for a particular settlement period (including the sales tax authority). Each jurisdiction is assigned one or more sales tax codes and has only one tax authority. Additionally, transactions that are posted for the sales tax jurisdiction are posted to the ledger posting accounts that are assigned to the tax account group that is selected in this form. Some state tax authorities collect taxes for all the jurisdictions within the state. If a state has many jurisdictions and a complex tax code structure, using
jurisdictions makes it easier for a company to pay correct tax amounts to the authority.
NOTE: A sales tax jurisdiction is not a geographical area. A geographical area
Procedure: Set Up Sales Tax Jurisdictions
Follow this procedure to set up sales tax jurisdictions:
1. Make sure that the configuration key is turned on for sales tax jurisdictions. Click on Administration, click Setup, click System, then click Configuration. Expand the General ledger configuration key, then expand the Sales tax key, and then if needed click the
Sales tax jurisdictions key to activate it. Close the form, and allow
the system to update the system configuration.
2. Click General ledger, click Setup, click Sales tax, and click Sales
tax jurisdictions.
3. Press CTRL+N to create a new sales tax jurisdiction record. 4. In the Sales tax jurisdiction code check box, enter a unique
identifier for a sales tax jurisdiction.
5. In the Name text box, enter the name of the jurisdiction. 6. On the General tab, in the Settlement period and the Ledger
posting group lookup fields, select the values that you want.
7. In the Currency lookup field, select the currency of the sales tax jurisdiction.
8. Click Sales tax codes. In the Sales tax codes form, create sales tax codes for sales taxes that the sales tax authority collects in the sales tax jurisdiction.
9. Close the forms.
NOTE: To create a jurisdiction sales tax code from an existing sales tax code:
Click General ledger > Setup > Sales tax > Sales tax codes. In the line for the sales tax code on the Overview tab, in the Sales tax jurisdiction code lookup field, select a jurisdiction.
Procedure: Set Up Sales Tax Groups for Jurisdictions
Follow this procedure to set up sales tax groups for jurisdictions:
1. Click General ledger, click Setup, click Sales tax, and click Sales
tax groups.
5. If necessary, you can change the sales tax codes of the jurisdiction in the Sales tax jurisdictions form.
6. Click the General tab. In the Print drop-down list, select the way you want sales taxes printed on the invoice.
7. Close the Sales tax groups form.
Lab 6.6 - Comprehensive Setup of Sales Tax
This lab offers comprehensive practice in setting up sales tax information in Microsoft Dynamics AX 2009.
Scenario
Ken, the Controller for Contoso, has decided to do business with a new vendor, Blue Yonder Airlines, located in Little Rock, Arkansas where business has not previously been conducted. April, the accounts payable coordinator, receives an invoice for $50,000 from Blue Yonder Airlines, and comes to you for help because the necessary setups are to post this invoice are not in Microsoft Dynamics AX 2009.
You determine to do the following:
• Set up Blue Yonder Airlines as a vendor
• Set up the Arkansas Department of Revenue as a vendor
• Set up two accounts in the Chart of Accounts: one for the Arkansas state sales tax payable (account 220107) and one for the Little Rock city sales tax payable (account 220245)
• Set up both ledger posting groups • Set up a sales tax authority • Set up sales tax settlement periods • Set up sales tax codes
• Set up sales tax code intervals • Set up sales tax groups • Set up item sales tax groups
The vendor's information is in the following table:
Field Value
Name Blue Yonder Airlines
City Little Rock
Comprehensive Setup of Sales Tax - Additional Lab Data
The information for Arkansas is in the following table:
Field Value
Name The Arkansas
Department of Revenue Search Name AR tax
Group 70 Terms of Payment M15
Method of Payment USAUSD_CHK
You can set up the sales tax authority by using the U.S. Report layout. Plan to round taxes in a typical manner to the nearest penny. Any gain or loss that occurs when you round will post to account 618160.
The tax breakdown for city and state taxes is as follows:
• City of Little Rock: three percent, the maximum tax limit that can be paid is $1000 in sales tax
• State of Arkansas: two percent
Challenge Yourself!
• Setup two ledger posting groups, by using ARST for Arkansas and LRAST for Little Rock.
• Setup a sales tax group by using ARLRA as the group name. • Setup a sales tax authority by using ARA as the authority name. • Enter a sales tax settlement period (AR) to use for each code. The
term of payment is fifteen days. The settlement period is an interval of one month. Then set up three new periods starting with the beginning of the current month.
• Plan to set up two sales tax codes, one for each authority, by using the codes ALL_LRCITY and ALL_ARST. Use the standard ledger posting group for each tax code.
• Add the two new sales tax codes to the ALL item tax group. • After you complete the sales tax setup, record the invoice in an
accounts payable Invoicejournal. Make sure when creating the journal that you have deselected the field Amount incl. sales tax found on the Setup tab of the journal. Set your session date to 6/30/2008.
Need a Little Help?
For a visual representation of the sales tax setup process, refer to the figure found in the lesson titled Sales Tax Overview- Suggested steps.
Note that Sales tax jurisdictions will not be used in this lab example. Review the tax calculation by clicking Inquiry and then clicking Sales tax
totals. It is not necessary to post the invoice.
Step by Step
Set up Blue Yonder Airlines as a vendor:
1. On the Navigation Pane, click Accounts payable, then click
Vendors.
2. Press CTRL+N to add a line. In CEU, the next available vendor number is assigned automatically based on setups in the sample data. 3. In the Name field, enter Blue Yonder Airlines.
4. In the Search name field, enter Blue Yonder. 5. In the Group field, click the arrow to select 10.
6. Click the Address tab. Click CTRL+N to create a new address. 7. In the Zip code field, enter 72205.
8. Verify that the tab entries are correct; these values were populated automatically based on setups in the sample data.
9. Click the Payment tab.
10. In the Term of payment field, use the arrow to select N030. 11. In the Method of payment field, use the arrow to select
USAUSD_CHK.
12. Click the Save icon on the toolbar.
Set up the Arkansas Department of Revenue as a vendor: 1. Click the Overview tab.
2. Press CTRL+N to add a line. The next available vendor number is assigned automatically.
Set up accounts in the Chart of accounts account for sales tax payable:
1. On the Navigation Pane, click General ledger, then click Chart of
account details.
2. Press CTRL+N to add a line.
3. In the Ledger account field, enter 220107.
4. In the Account name field, enter Arkansas state sales tax payable. 5. In the Search name field, enter AR sales tax pay.
6. In the Account type field, click the arrow to select Balance. 7. Click the Setup tab.
8. In the Posting type field, click the arrow to select Sales tax. 9. Click the Overview tab.
10. Repeat steps 2 through 8, adding an account 220245 for Little Rock city sales tax payable.
11. Close the Chart of accounts form. Set up ledger posting groups:
1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, then click Ledger posting groups, then click the Overview tab.
2. Press CTRL+N to add a line.
3. In the Ledger posting group field, enter ARST. 4. In the Description field, enter Arkansas State Tax.
5. In the Sales tax payable field, click the arrow to select account 220107.
6. In the Settlement account field, click the arrow to select account 220107.
7. Repeat steps 2 through 6, adding a ledger posting group for Little Rock.
8. Close the Account group form. Set up a sales tax authority for Arkansas:
1. On the Navigation Pane, click General ledger, then click Setup,
then click Sales tax, and then click Sales tax authorities.
2. Press CTRL+N to add a new line. 3. In the Authority field, enter ARA.
4. In the Name field, enter Arkansas Authorities.
5. In the Vendor account field, click the arrow to select The Arkansas Department of Revenue.
9. In the Round-off field, enter .01. 10. In the Account gain field, enter 618160. 11. In the Account loss field, enter 618160. 12. Close the Authority form.
Set up a sales tax settlement periods:
1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax settlement periods. 2. Press CTRL+N to insert a line.
3. In the Settlement period field, enter AR.
4. In the Description field, enter Arkansas Monthly.
5. In the Authority field, click the arrow to select ARA-Arkansas Authority.
6. In the Terms of payment field, use the arrow to select M15. 7. Click the General tab.
8. In the Period interval field, use the arrow to select Months. 9. In the Number of units field, enter 1.
10. Click the Periods tab.
11. If a new line is not available, press CTRL+N to add a line. 12. In the From date field, enter 06/01/2008.
13. In the To date field, enter 06/30/2008.
14. Click the New period button twice to create two additional months. 15. Close the Sales tax settlement periods form.
Set up sales tax codes and sales tax code intervals for Arkansas and Little Rock: 1. On the Navigation Pane, click General ledger, then click Setup,
then click Sales tax, and then click Sales tax codes. 2. Press CTRL+N to add a line.
3. In the Sales tax code field, enter ALL_ARST. 4. In the Name field, enter Arkansas State - All.
5. In the Settlement period field, click the arrow to select AR. 6. In the Ledger posting group field, click the arrow to select ARST. 7. Click the Values button.