Sales Tax Setup


MicroBiz allows for flexibility and accuracy in collecting sales tax in all jurisdictions and countries. To set it up you need to say who gets taxed, what the rates are and where they apply, and which products get which rates. All of this information gets defined in Tax Rules. Tax Rates, Product Tax Classes and Customer Tax Classes are used when you define your Tax Rules.


United States


If you have a single store and all your products are subject to the same tax rate - you can create 1 tax rate, 1 product tax class and a tax rule and set your store address and you'll be in business tax-wise. Otherwise you will have multiple rates and product tax classes.



General Steps US

  1. Create 1 or 2 customer Tax Classes "Taxable Customers (Default)" and if you need it "Non-Taxable Customers" . 

  2. Create Product Tax Classes - for some states you just need "Taxable Goods" and "Non-Taxable Goods" Depending on your State and what you sell you may need a separate "Shoes & Clothing" or possibly more like prepared food, medicine and so forth. Product tax classes get assigned to new product when you create them so make sure what you call your product tax classes makes your intention clear to your staff when they are creating new products. 

  3. Create your Tax Rates . .... 

  4. Create a Tax Rules for each State you have stores. "CA Sales Tax"   Add the taxable customer, add the applicable product tax class and rates and save. 

  5. Make sure you store address contains the country,state and if necessary county cited in the tax rate. 

  6. That's It. 


If you have special tax types like luxury taxes or tax tables see the full article on sales tax settings.

Most Other Countries


First, congratulations on using the metric system and having a sensible sales tax system. You probably have some sort of Value Added Tax - here are the steps to set that up. We're going to assume you have standard rate vat products in your store. And you might have some reduced rate vat products and maybe even some zero rate vat products. You can omit any rates that do not apply to your business. And be sure to change the names to conform to your local naming conventions - (TVA, BVW,USt etc.)

  1. Create 1 or 2 customer Tax Classes "Taxable Customers (Default)" and if you need it "Non-Taxable Customers" . 

  2. Create 3 Product Tax Classes: "Standard Rate VAT", "Reduced Rate VAT" and "Zero Rate VAT" you will assign these to your products so the register applies the correct rate. 

  3. Create 3 Tax Rates "Standard Rate VAT", "Reduced Rate VAT" and "Zero Rate VAT". It may be helpful to include the actual rate in the name "Standard Rate VAT (21%)" . To define the jurisdiction of the tax rate most businesses in most countries only have to select the correct country for the tax rate - and the rate will apply to all your stores with that country assigned. Don't forget to set the actual percentage rate.

  4. Create 3 Tax Rules "Standard VAT (21%)"  , "Reduced Rate VAT (7%)", "Zero Rate VAT" - change the names  to reflect your local rates and conventions. Add the taxable customer, add the applicable product tax class and rate (so add the standard rate product tax class and the standard tax rate to the standard tax rule)..and save. Repeat for reduced rate and zero rate if those also apply to you.

  5. Make sure you store address contains the country cited in the tax rate. 

  6. That's It. 


 

Examples


UK - England


Australia



CA - Ontario



CA - First Nations Exemption Rates



US - California - 2 stores with different rates



US - NY - General and Luxury Tax Rates



US - MA General and Luxury Tax



US - Florida 'Tax Tables'



US - Out of State Sales