Applying Tax Codes to Accounts

Summary

This document outlines how to set up a tax code and apply it to an account in EngageIP.

Sample Configuration

1. Load the Setup page and click on Tax Rates

2. On the Tax Rates page click the Add button to add a new Tax Rate

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3. Populate the Tax Rate details:
   
   

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   • Name: the name of the tax

   • Display Name: how the tax rate will be displayed when presented on an invoice

   • Rate: the tax rate. For instance entering 0.06 would setup a tax rate of 6%

   • GL Code: allows you to attach a GL Code to the tax rate for reporting purposes

   • Tax on Tax: allows you to configure this tax to be applied on top of taxes already applied to a charge. See the Advanced Taxing – Tax on Tax article for more information

4. Click Save

5. Return to the Setup page and load Tax Codes

6. Click on an existing code to edit it and add the Tax Rates (shown below GST and PST were added to the Ontario Tax tax code)

    

7. Next, you can apply the tax code to a service (if required) by selecting the service and clicking the Add button under the Components section. You can directly apply a tax code to a service, a service tax category, or simply choose tax exempt here. Any account receiving this service will be taxed based on that setting regardless of their geographic location

    

8. Add an Account as well as a Billing Contact to the account. Billing Contact must have an Address specified

    

9. When you add a package to the account, it will calculate the taxes based on the billing address

The taxes in this case were 6% GST and 8% PST

GST:  $ 1.22
PST:  $ 1.63
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Total Tax: $2.85

The account’s invoice may look something like this in terms of the representation of the taxes applied.

To view the tax, you can select the Taxes Payable report from the Reports tab.

Notice that the same charge is displayed twice in order to distinguish the multiple taxes applied to said charge.