Objective

Sales tax is a government imposed percentage tax on the selling of certain property or services. Sales tax will make part of the government's revenue. This means the taxing entity is budgeting for this expected income of cash & they expect your business to supply it. Thus the need of the business to track, collect, & report on sales tax.
AGRIS software has the capability of meeting these tracking & reporting needs. It's all in how the software is setup.
We will review some options for sales tax setup that show the simplicity & the complexity we can go to to accomplish the reporting needs you have. At the end of this class you should be armed with the knowledge you need to understand what and/or where the data you are currently collecting is within AGRIS & how to make the changes necessary to improve your functionality.

Where is the Tax

Tax information is connected to:

Invoice Line Items
Invoices
Payments

Invoice / Payment Structure

Note that the information that is driven to the ledger shows sales tax by the whole invoice, not by line items.

Note that the information is driven by the payment record. We do not know what line items were on the original invoice to tell us how to code tax. Only the invoice itself.
This means that when balancing the subsidiary to the ledger sales tax liability accounts, the accurate reports will come from AR Invoice reports & AR Payment reports.

Invoice Line Items

Used to default the appropriate tax rate & amounts that will be saved as the overall tax on the invoice.
The invoice line items will save the tax rate & tax amount that was calculated on each item.
Nothing regarding tax on individual line items will drive to the ledger.
The line item information can have reports run on it.

Invoiced in AGRIS – The percentage rate & amount of tax each line defaulted will save in the InvTran1.inv file. The Inventory Activity Report will print these fields & allow the user to print totals.
Invoice outside of AGRIS – other software created invoices that are imported into AGRIS may or may not bring this information into AGRIS. If they do bring the information, it is usually only the sales tax amounts that were used, not the rates.

User-Defined Inventory Activity Report - Sales Tax Report – By Product Category – Rates

Invoice

The invoice document carries the sales taxes that are calculated at time of invoice creation from the line items.
The Ledger is updated from the Accounts Receivable Invoice.
The customer will pay the tax amounts that are part of the overall invoice amount.
The invoice hold for sales tax buckets.
ACR – Setup Information – General Information – Screen 2 of 4

Each of these buckets represents a unique SJI transaction code so that you can drive each field to a different ledger account.
These four sales tax fields are linked to four tax fields on the name/address record & the inventory item record.
Name/Address Accounting Information Screen

These Y/N flags will keep/remove the tax keyed on line items at time of invoicing when you get to the Invoice Summary Screen.
Inventory Item Pricing Information Screen

These codes on the item allow the sales tax field to open up on the invoice during line item entry. If you cannot see these fields on the item at invoicing, then the item itself does not have a table for itself in the Item Maintenance.

You run detailed tax reports form the AR Invoice Reports option.
AR Invoice Report – Monthly Sales Tax Summary

SJI Exec ID – Transaction Analysis Report

Payment

The Payment document carries the sales taxes discounts, if you offer them, that are taken at time of payment of invoice.
If Sales Tax Discounts are turned on, then your invoice terms discount amount will include the discount on items plus sales tax. Warning: Some states require an amended tax return on sales tax discounts. Please check your state's requirements prior to offering sales tax discounts. The extra paperwork may not be worth offering this to your customers.
ACR – Setup Information – General Information – Screen 2 of 4

Invoice Line Item Entry showing Discount & Tax Entry

Invoice Summary Showing Sales Tax Calculation & Discount Affect

Notice that the discount includes the Sales Tax as part of its calculation.
User-Defined AR Payment Report showing Discount Given on Sales Tax

Please note that you do not have the option to sort by state/county code in an AR Payment report although you can print it. Best option would be to take this to a spreadsheet format & sort by state/county for subtotaling purposes.
SJI Exec ID Report – Transaction Analysis Report for Payment Giving Sales Tax Discount

Reports

The reports that show you sales tax calculations or sales tax collected are found through out AGRIS:

Inventory Activity Reports (Standard) –

Sales Tax Report – by Product
Sales Tax Report – by Product Description

Sales Tax Theory - Setup - Reporting