Acute Data Systems

How to Create and Setup Sage 100 Taxes

Summary

The first step in defining sales tax information is to define different types of tax classifications in Sales Tax Class Maintenance in Sage 100. The system defines automatically Nontaxable (NT), Taxable (TX), and Taxable Freight (TF). The next step is to define the sales tax codes and then to define the sales tax schedules.

Once the Sales Tax Schedules are created, you can then assign them to Accounts Receivable Customers in AR Customer Maintenance. This will be the default Sales Tax Schedule for that customer.

Resolution

Define Sales Tax Classes

  1. Open Library Master, Setup, Sales Tax Class Maintenance.
  2. Enter a class in the Tax Class field.
  3. Type a description for the tax class.
  4. Click Accept.
  5. Repeat for each required tax class.
  6. Assign tax classes to item codes, inventory items, and miscellaneous charges.

 NOTE: The TF (Taxable Freight) tax class calculate sales tax on freight amounts. 

Define Sales Tax Codes

  1. Open Library Master, Setup, Sales Tax Code Maintenance.
  2. Enter a code in the Tax Code field.
  3. Type a description.
  4. If needed, enter a Taxable Limit. For example, some tax jurisdictions have a limit for the amount of sales tax you can define.
  5. Type a Short Desc for printing tax details.
  6. Choose whether to Calculate Sales Tax on Retention.
  7. Decide if the Expense to Vendor/Item option applies.
  8. Check the box to allocate the Nonrecoverable portion of purchase sales tax.
    • To the vendor’s Expense account, in Accounts Payable
    • To the Inventory account, in Purchase Order
  9. Select Tax on Tax if applicable, and enter the tax class for calculations.
  10. For each tax class (except NT), set.
    • Sales: Calculate sales tax for this code
    • Tax Rate: Enter the percentage
    • Purchases: Indicate if purchases are taxable
    • Nonrecoverable %: Enter the percentage if purchases are taxable
  11. Click OK and Accept.

Define Sales Tax Schedules

  1. Open Library Master, Setup, Sales Tax Schedule Maintenance.
  2. Enter a schedule in the Tax Schedule field.
  3. Type a description.
  4. Add each tax code to the schedule and click OK.
  5. Repeat for all required tax codes.
  6. Ensure the correct sequence for “tax on tax” calculations.
  7. The first tax code becomes the primary tax code.
  8. Click Accept.
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