Taxes
Your business’ financials are affected by regulatory taxes and each organization has different country specific taxes to adhere to. You may have added Taxes in the Quick Setup section. You can edit or add further Taxes through the Settings section.
Enabling Sales Tax
You can enable Sales Tax for your organization as early as while creating it. In the organization creation page, just check the box that says Is you business liable to collect sales tax?
You can also enable Sales Tax for your organization, by following these steps:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- If you haven’t enabled Sales Tax already, you will be prompted with the option to enable it here, as shown below:
Note: If you have enabled a Recurring invoice profile or connected your account to Stripe or done both, you will be prompted to enter a default Exemption Reason and Tax Authority.
Alternatively, you can skip the process of manually determining and associating sales tax rates to your transactions, by using the Avalara integration. Click here to know more about this option.
Disabling Sales Tax
To disable sales tax:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- Click Disable Sales Tax in the top right corner.
Note: You can disable sales tax only if there are no transactions associated with sales tax.
Adding New Taxes
To create or add a new Tax, follow steps as below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- To add a new tax, click + New Tax.
- Provide a Tax Name.
- Enter the relevant Rate in %.
- Specify the name of the Tax Authority.
- Click Save.
Editing Taxes
To edit an existing Tax follow steps as below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- Click on a tax you wish to edit.
- In the Edit Tax screen, edit the desired fields such as Tax Name, Rate and Tax Authority.
- Click Save for the changes to take effect.
- If this tax has already been applied in some transactions, you will asked to confirm if you wish to update the new tax rate in those transactions as well.
Deleting Taxes
To delete an existing tax follow steps as below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- Scroll over the desired tax row and click on the trash bin icon which appears. Confirmation pop-up screen will double check your intention. Click to OK to Delete or Cancel to skip.
Adding a New Tax Group
To create a Tax Group, follow steps as below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- Click on the + New Tax drop-down and select New Tax Group.
- Provide a Tax Group Name.
- Select the taxes to be clubbed together by clicking on the check box, next to the desired taxes.
- Click Save to add new tax group.
Adding a New Tax Exemption
There might be situations where you are exempt from paying taxes because of the item or the customer to whom you are selling the product. For example, the sale of medicines is exempt from sales tax in New Jersey.
To create a Tax Exemption, follow the steps below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- Click on the + New Tax Exemption button.
- Provide a Exemption Reason and enter a short description if necessary.
- Select the basis of the tax exemption by choosing either Customer or Item under Type.
- Click Save to add the new tax exemption.
Adding a New Tax Authority
To create a Tax Authority, follow the steps below:
- Click Settings on the top right corner of the page.
- Click Taxes under Taxes & Compliance.
- In the Taxes pane, click Tax Rates.
- Click on the + New Tax Authority button.
- Enter the name of the Tax Authority and provide a short description if necessary.
- Click Save to add the new tax authority.
Other Actions
You can mark any one of the taxes added as the default tax. Henceforth, whenever a transaction is created, that particular tax will be selected by default. To mark a tax as the default tax, hover the cursor next to a particular tax and click on the mark as default button.
You can also delete a tax by clicking on the Trash icon.
—s
Yes
No
Thank you for your feedback!
