SI5 provides a lot of flexibility when it comes to calculating taxes on client proposals. However, all tax values presented should be considered estimates. Your accounting system will provide the definitive tax calculations for reporting to your friendly tax authorities. Creative taxation seems to be on the rise. Individual tax rates may apply at the municipal, regional, state/provincial and national level. These rates may apply differently depending on the use of product or how it is sold. SI5 can handle most of these tax situations.
For a Product to be taxed one must:
1) Choose the most appropriate Tax Code in the Navigator via Setup tab->Application Settings tab->Tax section:
2) You can choose either Standard, Australia, New Zealand, Canada:
3) Set the default rates tax rates that apply to you. The fields you see will depend on the Tax Code you selected. These are your default tax rates meaning that they will initially apply to any Project you create. You may modify tax rates on a per Project basis when necessary.
Standard – has separate fields for Sales Tax and Labor Sales Tax.
Australia – has just a Sales Tax field active. When you see “Sales Tax Rate”, think GST. Tax is applied to all products and labor in the project.
New Zealand – has just a Sales Tax field active. When you see “Sales Tax Rate”, think GST. Tax is applied to all products and labor in the project.
Canada – There are multiple tax codes listed and you have the option of adding PST Tax and/or GST Tax to the various Tax Codes.
4) Check the “Taxable” box for the Product on the Product Properties form. Or in the case of Canada, select the appropriate Tax Code(s) as described later in this section.
Use the following rules to determine which Tax Code best suits your needs. Just because you do not live/work in Canada does not mean that you can’t choose to use the Canada Tax Code. Each Tax Code has a specific functionality, so choose the one that works best for you.
Once the Tax Method is set you may adjust the default rates. The user interface depends on the Tax Code selected (see below).
This method allows you to have one tax rate for Non-Labor Products (Equipment, Wire and Speakers) and another rate for Labor.
Labor and Sales Tax will show as separate line items on client reports. Sales Tax is applied to the sum of Equipment+Equipment Adjustment+Misc Parts. Misc Costs are NOT taxed in any of the Tax Codes. Labor Sales Tax is applied to the total labor selling price, referred to as Install Labor. The Install Labor amount may include Install, Design, Management, and Miscellaneous labor. Products of Class “Labor” are also included in the Install Labor figure.
The Australia and New Zealand Tax Code are the same. Equipment and Labor are taxed at the same rate. Only one rate is shown but it is applied to both Equipment & Labor. The client report label will show “GST:”
Example: Sales Tax is set to .07. For this Project, GST Tax = .07*(.07(26110+522.20-522.20+5619.53) = 2,221.07
The Canada Tax Code option is by far the most complex. Let’s start with the report and work backwards. There are two reported tax values that can be reported, GST Tax and PST Tax. Each Product, with the exception of products of Class “Labor”, has three fields by which to assign tax rates; Purchase Tax Code, Sales Tax and Labor Sales Tax. You may assign each of these fields one of the following Tax Codes (E, G, P, S, Z) as shown below. These codes correspond to the rows in the Canadian Tax Table and to those used in the Canadian version of QuickBooks.
Note: See here for information on displaying HST on your reports.
Purchase Tax Code: The Tax Rates for the letter associated with this code are applied to the Cost, not the Unit Price, of Non-Labor Products. This code does not apply to Labor Products. This code is NOT used in any D-Tools standard report or computation. See here forKnown Issues relating to the Purchase Tax Code and QuickBooks.
Sales Tax: The Tax Rates for the letter associated with this code are applied to the Unit Price of Products (with the exception of Products of Category “Labor”…noticing a pattern here?).
Labor Sales Tax: The Tax Rates for the letter associated with this code are applied to the selling price of Labor and Products of Category “Labor”.
Example: Let’s assume we are using the following Tax Table. These values are not actual Canadian tax values, but are used for explanation purposes only. Not even Canadians would attempt taxes like these.
Then assign the codes to a Product by using the dropdowns as shown below.
The “P” code is applied to the product Unit Price, the “S” code is applied to the total labor price as defined by 2 hours of Finish labor, and the “G” does nothing as the Purchase Tax Code is not used at all in SI 5.
PST= .07*[Unit Price] +.09*[Labor Price]
GST= .08*[Unit Price] +.1*[Labor Price]
The ability to mix and match these rates provides a lot of flexibility.
Canadian taxes will show up on standard reports as follows:
If you want to change the label(s) that display for your taxes within our Project Summary section, you can make your adjustments underGlobal Report Settings.