Tax Areas

Tax Areas allow you to enter tax rates for different jurisdictions; you can enter as many of them as you need. Tax Areas can be assigned to Client records and/or the Client's alternate Ship/Bill To records (if any exist). The Tax Area assigned to the shipping address [that is used on the Sales Order] will be used for calculating taxes for that Order by default. You can change the Tax Area on the Sales Order if you need to.

1. Open the Tax Area window

Navigate to General Ledger ➤ Tax Areas

1. Open the Tax Area window

2. Create a new Tax Area record

Click the Create New Record icon or use the keyboard shortcut Command + N.

3. Enter the Tax Area Information

Tax Area Information

  • Tax Area Name: The name of the Tax Area, typically a State or Municipality although not necessarily. If needed, you could create an “Exempt” record for Clients who do not have to pay sales tax, or an “Out of State” record for Clients who are in another state.
  • City: The tax rate for a specific city in this tax area.
  • State: The tax rate for a specific state in this tax area.
  • Transit: The tax rate for transit in this tax area.
  • Extra 1 & Extra 2: Enter any other applicable tax rates for this tax area.
  • Total: The sum of the tax rate fields above (non-enterable).
  • Include Freight Charges: You have the option to include Freight Charges on an Order in the calculated tax amount by checking this box.

GL Distribution

  • GL Account Code & GL Account Name: These fields are automatically populated by the default Sales Tax Account entered on the G/L tab in System Setup (see next screenshot). You can override the default GL Account for a specific Tax Area.

3.1 Default Sales Tax Account (System Setup)

4. Enter a Tax Area on a Client Record

4.1 Select a Tax Area for a Client

4.1 Select a Tax Area for a Client