How to set up multiple sales taxes in Accounting Express, in Accounting Professional, or in Small Business Accounting

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Article ID: 835291 - View products that this article applies to.
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INTRODUCTION

This article describes how to set up multiple sales taxes in Microsoft Office Accounting Express, in Microsoft Office Accounting Professional, or in Microsoft Office Small Business Accounting.

MORE INFORMATION

When you create a company in the Startup Wizard, you must indicate whether you collect sales tax. If you click Yes, you must indicate whether you collect a single sales tax or if you collect multiple sales taxes.
  • If you select the option to collect a single sales tax, the Startup Wizard helps you create a tax agency, a tax code, and a tax group.
  • If you select the option to collect multiple sales taxes, the Startup Wizard does not help you create tax agencies, tax codes, or tax groups.
To set up multiple sales taxes after you create a company, follow these steps.

Step 1: Create tax agencies

Tax agencies are the institutions to which your company pays taxes on the products and the services that your company sells. Your company may have to collect sales tax for city tax agencies, county tax agencies, and state tax agencies. After you create a tax agency, the tax agency appears in the vendor list.

To create a tax agency, follow these steps:
  1. On the Company menu, point to Sales Tax, and then click New Tax Agency.
  2. In the Tax Agency window, enter the appropriate information in the following boxes:
    • Tax agency
    • Payment term
    • Liability account
  3. Click Save and Close.

Step 2: Create tax codes

Tax codes in Accounting Express, in Accounting Professional, and in Small Business Accounting define the individual tax rates for sales tax that is paid to each tax agency. To create tax codes, follow these steps:
  1. On the Company menu, point to Sales Tax, and then click Manage Sales Tax Codes.
  2. Click Add.
  3. In the "Add or Edit Tax Code" window, type a name in the Tax code box.
  4. In the Tax agency box, select the tax agency that is associated with this tax code.
  5. In the Tax settings pane, enter the sales tax rate as a percentage in the Rate column. Then, enter the date that the percentage went into effect for this company in the As of column.

    Note The date in the As of column cannot be earlier than the company start date that you entered in the Startup Wizard.
  6. Click OK.
  7. Repeat step 2 through step 6 for each sales tax.
  8. In the "Modify Tax Code name" window, click Close.

Step 3: Create sales tax groups

Sales tax groups make it easier to apply sales tax to invoices. To create sales tax groups, follow these steps:
  1. On the Company menu, point to Sales Tax, and then click Manage Sales Tax Groups.
  2. Click Add.
  3. In the Tax Group window, type a name for the tax group in the Selected Tax Group box.
  4. In the Available Tax Codes pane, click to select a tax code that you want in this group. Then, click Add.

    The tax code is moved to the Selected Tax Codes pane.
  5. Repeat step 4 for all the tax codes that you want in this group.
  6. Click OK, and then click Close.

Step 4: Assign a tax group to a customer

Assign a tax group to a customer so that the tax group is always used for quotes, sales orders, or invoices for that customer. After you assign a tax group on the Details tab of the Customer window for a new customer, that tax group is automatically assigned to any new customers. You may have to add the tax group to existing customer records that were created before you set up multiple sales taxes.

To assign a tax group to a customer, follow these steps:
  1. On the Customers menu, point to Customer Lists, and then click Customers.
  2. Double-click the customer record to which you want to assign a tax group.
  3. Click the Details tab.
  4. In the Tax group field, select the tax group for this customer.
  5. Click Save and Close.

Properties

Article ID: 835291 - Last Review: September 10, 2011 - Revision: 5.0
APPLIES TO
  • Microsoft Office Accounting Professional 2008
  • Microsoft Office Accounting Express 2008
  • Microsoft Office Accounting Professional 2007
  • Microsoft Office Accounting Express 2007
  • Microsoft Office Small Business Management Edition 2006
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