| • | Sales Tax Table – In most states, the Sales Tax Table is quite simple. You will of course want a code for every state that you collect sales tax. For states that you do not collect sales tax you may choose to enter each individually with a rate of 0% or one all encompassing code for Out of State (OS). There are some unique circumstances depending on the state you do business in so it is important to thoroughly review this section before proceeding. |
| ▪ | Create a new Tax Code (3 characters / alphanumeric) unique from existing codes provided in the list box (i.e. PA). Click OK. |
| ▪ | Description (20 characters / alphanumeric) – A full description of the taxing authority (i.e. Pennsylvania). |
| ▪ | Tax Rate (10 characters / numeric) – The percentage of tax to be collected represented without symbols. A tax rate of six and one-half percent would be represented as 6.5. |
| ▪ | Florida Surtax Sales Limit (10 characters / numeric) – ONLY applicable for those collecting tax within the state of Florida. Use to set the total sales limit for which the surtax can be applied. Works in conjunction with the County of Residence option. |
| ▪ | Additional Tax Code – This code prompt may be used to identify additional tax municipalities where sales tax is collected. This feature was added for states like Alabama where a sale may be subject to a Police District Tax, City Tax, County Tax, and the Alabama State Tax. Each municipality requires a separate sales tax return. If you think you may need this field, be certain to read Taxes By County following this section. |
| ▪ | Taxable Freight – To be flagged if freight is taxable within concerned municipality. |
| ▪ | Illinois Alternate Tax Method – ONLY for use by distributors operating in Illinois. The letter of Illinois sales tax law requires that sales tax on custom jobs be calculated on the cost of the materials that go into the job, rather than the sell price of the job. Most manufacturers in Illinois provide the taxable cost of each job on their invoice. Even in Illinois, most distributors use a special compromise worked out between printing associations and the state. The compromise allows tax to be calculated on 50% of the sell price of the job, or at 1/2 the regular tax rate. |
| ▪ | County of Residence - ONLY applicable for those collecting tax within the state of Florida and used in conjunction with the Florida Surtax Sales Limit. This is used to represent the county in which YOUR operation resides; NOT your customer's. Checking this option enables an additional figure on the Sales Tax Report representing the amounts subject to surtax at a rate different than your county of residence. |
Taxes By County - In many states, the sales tax rate varies from one county or city to the next. The best way to handle this situation is to associate each customer shipping address with a tax code for the county and have a sales tax table entry for each county that identifies the tax rate for the county.
The situation changes for distributors who have to file multiple sales tax returns. Let's look at an example of a distributor who must collect both New Jersey and New York sales tax. New York sales tax varies by city and county. When New York customers are identified, they are identified by the tax code that applies. New Jersey has a uniform tax rate. Customers are identified by the state. When the sales tax report is printed, there will be a summary of New Jersey taxes and a summary of each separate taxing authority in New York. There is a combined total of both New York and New Jersey, but no separate total for New York.
In order to prepare the New York sales tax return, the different taxing authorities must be added up by hand, or the New Jersey totals must be backed out of the totals to get the totals for New York. In most states where tax varies by municipality, a combined return is filed for the state with total taxable sales, exempt sales, and tax collected. There is an additional section to provide the amount of tax collected for each municipality. In Alabama, however, each municipality requires a separate sales tax return. For states like Alabama, the customer shipping address is associated with the lowest level taxing authority. For the example we will call the lowest level taxing authority the Southwestern Police District. The sales Tax table contains an entry for the Southwestern Police district with a rate of .5%, the amount due the police district. The police district sales tax table entry has an additional tax code for the City of Mobile. The City of Mobile Tax record has a rate of 1% and an additional tax code for Mobile County. The Mobile County tax table entry has a 1% rate and an additional tax code for Alabama. The tax table entry for Alabama has a 2% tax rate. The Xebra will calculate the total tax (4.5%) for the job and report each municipality separately, with their portion of the tax.
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