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Level 1

How do I set up sales tax and with options for multiple rates?

Thanks to a recently passed law, graphic designers in Pennsylvania now have to charge sales tax for the first time ever. To make matters worse, the law makes it so the rate is variable depending on where the customer is located: 8% for Philadelphia, 7% for Allegheny County (Pittsburgh) and 6% everywhere else in the state. In my situation, my clients will all fall under the 6 or 7% tax.

I went to Preferences > Sales Tax and checked "Customers are charged for sales tax" as I've seen other suggest. Beyond that, I'm not finding instruction on what to do next.

When I tried to create an invoice, I now have a Tax Item drop-down box on the bottom right, but the drop-down menu is blank. The text rate is set to 0.00% and is not editable. I don't see where to set up that 6 or 7% sales tax.

I charge by the hour, with various standard, rush and weekend rates in my Item List applied to a time sheet. I see when I edit those Items that there is a check box to make them taxable, but, again, I don't see where to set up the sales tax amount.

Any help would be appreciated.

Solved
Best answer 12-10-2018

Accepted Solutions
Level 2

It is not too difficult.  It sounds like you turned on th...

It is not too difficult.  It sounds like you turned on the Sales Tax system within preferences.  You now need to set up sales tax items for each for the taxing jurisdiction and tax.  For example here in SC we have a state sales tax and then local county options.  Thus I would set up a tax item for the state tax (6%) and then the local options for each county we due business in (say 1%).  

Then you will set up tax groups to get the combined rate for the various counties.  For example here in Richland County, SC we have a state tax and two different local options (Transport 1%, local Opt 1%).  I have a tax group called Richland Cnty that has multiple tax items for a total of 8%.  

If you don't need all the detail to report your taxes you could always simply set up an item for each country and enter their rate, but I always suggest people take the extra step to set up the groups to have the detail and make it easier to manage if rates change.

You will also need to go in to each of the items you bill and set them to taxable.

You can then go into the customers and assign them to default taxing groups.

Once you do that when you bring up a customer it should have their default tax information.  If not you can select the correct taxing groups when you do the invoice.

Hope that helps.

View solution in original post

5 Comments
Level 2

It is not too difficult.  It sounds like you turned on th...

It is not too difficult.  It sounds like you turned on the Sales Tax system within preferences.  You now need to set up sales tax items for each for the taxing jurisdiction and tax.  For example here in SC we have a state sales tax and then local county options.  Thus I would set up a tax item for the state tax (6%) and then the local options for each county we due business in (say 1%).  

Then you will set up tax groups to get the combined rate for the various counties.  For example here in Richland County, SC we have a state tax and two different local options (Transport 1%, local Opt 1%).  I have a tax group called Richland Cnty that has multiple tax items for a total of 8%.  

If you don't need all the detail to report your taxes you could always simply set up an item for each country and enter their rate, but I always suggest people take the extra step to set up the groups to have the detail and make it easier to manage if rates change.

You will also need to go in to each of the items you bill and set them to taxable.

You can then go into the customers and assign them to default taxing groups.

Once you do that when you bring up a customer it should have their default tax information.  If not you can select the correct taxing groups when you do the invoice.

Hope that helps.

View solution in original post

Highlighted
Level 1

Thank you so much! This was precisely what I needed to know.

Thank you so much! This was precisely what I needed to know.
Anonymous
Not applicable

Where do we change county tax rates at?

Where do we change county tax rates at?
Level 1

I actually did set up all the groups for the tax rates bu...

I actually did set up all the groups for the tax rates but it is still giving me a 0% even though the total should be 6.875 + .25 + .50 It should be more than zero.
Level 1

Re: I actually did set up all the groups for the tax rates bu...

Did you assign the tax group you set up to the customer?   I have to go into each individual customer record, select the "sales tax settings" tab, then enter the tax group in the "tax item" field.  

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