Shipping and Taxes - D-Tools Forum

ekalpakoff · 07-29-2009, 04:53 PM

Normally we have been adding shipping to our projects as an equipment item. It was recently brought to my attention that one of our clients got audited recently and now are dotting their i's and crossing their t's very maticulously. That being said, they called and complained the final dollar amount for tax on the last page of the proposal report didn't add up since shipping wasn't taxable but still listed as equipment. So here are my questions:

1.) Are most people adding shipping as an equipment item or a labor item?
2.) Is there any way to make shipping a seperate listing in the grand total of the proposal report?
3.) Is there a better way than what we are doing?

Thanks a bunch,

- Eric

**Ryan Brown** · 07-29-2009, 06:58 PM

Hey Eric,

Great question. There are several ways that integrators are dealing with this (and I'm sure more that I don't know of). Here are a couple common ways of handling this:

1. Using an equipment item. If you are doing it this way you need to make sure that the 'taxable' field on the price tab for this item is NOT checked off. Tax will not be applied for this amount in this case. Can be confusing for some as the client may multiply equipment price * tax rate and not get the number = what is displayed on the report.

2. Use Misc Costs field. This misc costs (different than misc parts) - found under D-Tools -->Options allows you to specify specific misc costs as line items (not database items only stored in the project). These misc costs are not taxed and are added to the project after the Tax amount in the project summary. If you don't want it to display as 'Misc Costs' this would require modifying the report in the designer to have Misc Costs say "Shipping". The misc costs are not calculated based on a percentage, but is user defined.

There are other methods that can be used but I've found these two to be the most common.

ekalpakoff · 07-29-2009, 08:27 PM

In response to 2.) I thought about the misc costs but that does not transfer through quicklinks into QB. I had that issue with other projects.

In response to 1.) item, It already is set for non-taxable but, when the report is generated, Equipment price at the end multiplied by CA sales tax 8.75% does not add up to the sales tax line just below. For example: If I sell "widget A" for $100+tax and shipping is $30(no tax) The equipment total at the bottom will show $138.75 and the tax line will read $8.75. If you try to calculate tax manually from the bottom of the report (like the bean counters do) $8.75 is not 8.75% of $138.75. That is the issue we are dealing with.

**Ryan Brown** · 07-29-2009, 09:25 PM

Sorry, good point: forgot to mention that - IF you're using QuickLinks and the Misc Costs method - you need to manually enter the misc cost value for shipping into QuickBooks. **FEATURE REQUEST** - Misc costs should be transferred to QuickBooks via QuickLinks. The risk to using this one is that someone forgets to pass the shipping value along to QuickBooks manually. So there needs to be a process for verification that this is completed.

If you still decide to use the equipment item, you might consider including some type of a disclaimer in your report's summary:

**Please note that shipping charges have been included in the equipment total and are not taxable** or equivalent.

This might be a little lengthy of a process to accomplish this, but it will allow for the item to go over to QuickLinks AND it will allow for the Shipping to show as a separate line on the original proposal.

1. Create your project, manage revisions until you have a version the client accepts.
2. Use Misc costs at this point to represent your shipping. Their proposal will show shipping as a separate line (misc costs) and equipment total * tax rate will calculate properly.
3. Upon acceptance - create a revision of the project (rev 0)
4. Open (rev 1) and remove the misc cost, replace it with an equipment item for shipping for the same amount.
5. Create another revision (rev 1)
6. Move forward with the project now, managing change orders business as usual.
7. Now, When you use QuickLinks it will transfer over the equipment item representing shipping.