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Sales Tax V2

Overview

Sales Tax V2 has the following improvements over V1. You can now:

  1. Assign a separate Sales Tax Account and Purchase Tax Account by Tax Jurisdiction.

  2. Set up Tax Details by Tax Jurisdiction. The same Tax Jurisdiction can be reused in different Tax Areas.

  3. Tracks individual Tax Rates and Tax Amounts by Tax Jurisdiction on Sales Lines and Sales Invoice Lines.

  4. Post Sales Tax GL Entries by Tax Jurisdictions.

  5. Print Sales Tax by Tax Jurisdictions on Sales Order PDF and Sales Invoice PDF.

Contact a GoldFinch consultant if you want to turn on Sales Tax V2 or follow the following steps.

To Turn on Sales Tax V2

  • Navigate to Custom Setting → System Setting. Create a parameter for SalesTaxV2 and specify a value that is True.

  • Update the following page layouts if you convert from Sales Tax V1

On the Tax Area page, delete the Tax Jurisdiction related list, then add the Tax Area Line2 related list.

On the Tax Area Line page, make sure the Tax Jurisdction v2 field appears.

On the Tax Jurisdiction v2 page, make sure the Tax Details related list appears. Delete the Tax Jurisdiction and the Tax Area fields from the related list.

On the Tax Detail page, remove the Tax Jurisdiction and the Tax Area fields. Add the Tax Jurisdiction v2 field.

Default “NoTax” Setups

Most companies do not charge Sales Tax. GoldFinch Sales Tax module is pre-configured to have a 0% sale tax rate using a "NoTax" Tax Area and a "NoTax" Tax Group.

  1. If you are a B2B wholesaler, assign "NoTax" as the Tax Area for all customers and alternating shipping addresses, and "NoTax" as the Tax Group for all items.

  2. If you use a B2C E-Commerce platform, assign "NoTax" as the Tax Area for all customers and alternating shipping addresses, and "NoTax" as the Tax Group for all items. 

    1. Set up sales tax in the e-Commerce platform, and then configure the E-Commerce integration module to download the sales tax as a separate line item.

Taxable Setups

If you would like to calculate sales tax in GoldFinch, follow the following steps.

Set up Tax Areas

Open the App Launcher. Search for Tax Areas.

Click on the New button to create new tax areas. Tax Areas are codes used to group multiple Tax Jurisdictions to define the combined tax rate. It is linked to a customer account or alternate shipping address.

Set up Tax Jurisdictions v2

Open the App Launcher. Search for Tax Jurisdiction v2.

Click on the New button to create a new tax jurisdiction and assign Account Sales Tax and Account Purchase Tax.

Set up Tax Details

On Tax Jurisdiction v2, click New on the Tax Details related list to set up a new Tax Detail record.

Choose a Tax Group. Tax Group can be Material, Labor, Freight, or No Tax. In some Tax Jurisdictions, the sales tax rates for Material, Labor, and Freight could be different.

Enter a Tax %.

Assign Tax Jurisdictions to Tax Areas

Click on the Tax Area you want to add a new Tax Jurisdiction to.

In the Tax Area Line2 section, click on the New button to create a Tax Area Line.

One Tax Area could have multiple Tax Area Lines, and each Tax Area Line is assigned a Tax Jurisdiction.

For example:

NJ charges 7% sales tax. To set up Sales Tax for companies in NJ, you want to set up a Tax Area named “NJ”, and under NJ, set up a Tax Area Line with a Tax Jurisdiction named “NJ.”

New York City charges 8.875% in Sales Tax. There are three different tax jurisdictions in NYC:

  • New York State (NYS) charges 4%

  • New York City (NYC) charges 4.5%

  • Metropolitan Commuter Transportation District (MCTD) has a surcharge of 0.375%.

To set up sales tax for companies in NYC, you want to set up a Tax Area named “NYC, NY”, and under NYC, you can set up 3 Tax Area Lines with Jurisdictions named “NYS”, “NYC”, and “MCTD”.

Assigning Tax Area

You can assign Tax Area to Accounts or to Alternate Shippings within the Accounts.  

Click on the App Launcher. Search for Accounts.

Click on the Account you want to assign a Tax Area to.

In the GoldFinch ERP section, you may assign the Tax Area. If the Account is taxable, check the field Tax Liable.

In the Alternate Shipping section, click on the New button to add an Alternate Shipping address. You may also click Edit if the Alternate Shipping already exists.

Specify the Tax Area you want to assign. If Alternate Shipping is taxable, check the field Tax Liable.

Assigning Tax Group

You can assign a Tax Group(Material, Labor, Freight, or No Tax) to an item.

Click on the App Launcher. Search for Items.

Click on the item you want to assign a Tax Group.

Depending on the actual usage (resale vs. own use) of the items, it is possible to update the Tax Group field on the Sales Line, Purchase Line, Sales Invoice Line, and Purchase Invoice Line to recalculate sales tax. If you don’t see the Tax Group field on the Edit page layout, you can add it to the fieldset.

Calculating Sales Tax on a Sales Order

  1. Tax Area and Tax Liable for the Sell-to Customer Account are copied to the Sales Order.

  2. If Alternate Shipping is not blank, Tax Area and Tax Liable for the Alternate Shipping will be used instead. The Tax Rate for the actual shipping address overrides the Tax Rate of the Sell-to Customer’s address.

  3. Tax Group for Items is copied to the Sales Line.

  4. GoldFinch will calculate the Sales Tax upon saving the Sales Order based on Tax Area, Tax Group, and the Tax Liable flag.

  5. The same Sales Tax calculation logic applies to both Sales Quotes and Sales Invoices.

Print Documents

Sales Tax by Tax Jurisdiction will be printed on the Sales Order Confirmation PDF and Sales Invoice PDF.

Print Reports

Print the GF2030 Sales Tax by Tax Jurisdiction report to review your sales tax liability by Tax Jurisdiction.

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