CJ976

Anyone know if/how I can base my sales tax on product cost rather than base it on the retail pricing?

Other than creating a SKU for each phase and calculating the sales tax myself for each project and location (while making all products in my database non-tax items) I can not seem to figure out another way (other than maybe in the script file within the reporting center perhaps?).

RandyB

Unfortunately, the only way to do this at the moment is with scripting in the reporting center, which would not persist outside of the report (in other words, you wouldn't see it in the project price in the UI, or when you create sales orders, etc.) Such scripting is not very complex once you know how to create a calculated field.

[Alternative: If you're desperate, and I do not recommend doing this, there is currently a bug in 5.2 whereby the Canadian Purchase Tax Code is being applied to the cost of items. You could use Canadian taxes for your project and make this work once you understand how Canadian taxes work. Note that this bug will be fixed once 5.5 comes out, so this is not a long-term solution, and may lead to other complications.]

The long-term solution is of course that we implement this in the software. Towards that end, I've added your name to the list of people who have requested this feature. It is definitely something we'll be looking at for the next major version.

CJ976

Just wondering - how do most users find themselves charging tax on projects? There's a debate going on among local AV dealers as far as when one should and/or should not charge tax on products and labor - how new construction is handled verse retro and/or service work. Perhaps it differs state by state, county by county - just curious.

CrystalHacker

Just curious... In the US, under what circumstance would you have to pay tax on the cost of goods that are resold? Doesn't the end user pay the sales tax on the retail price.

In Canada the end user only pays tax on the cost (not selling price) of items that are determined to be part of the structure, such as wiring, wall plates, etc. The more stuff the dealer can lump into this category the better since taxes eat into the end user's budget. I'm not sure who enforces these rules.

The D-Tools Canadian tax rules may work for you if that is your situation.

You are correct, sales tax can be very complicated and is governed by state, county and local municipality. These days they are looking at every possible way to increase tax collections, so be careful.

-ch

CJ976

My understanding is that the end user pays sales tax on all items - but there are some who say you are to charge sales tax on your (the dealers) cost. To me this then opens you up to the home owner figuring out your cost on products then ripping you a new one on what you're marking things up.

I've heard that some in my area are not charging tax on items that are considered part of the structure as you noted. Some of those are also debating whether items like in-wall touch panels are considered part of the structure or not...

I've also heard that some charge sales tax on labor only when they are performing service related work (after the install for instance) but not on their initial proposal.

Just seems so overly complicated doesn't it?

Rethink

This is a major issue for us as well. We do mostly commercial installations and when doing major upgrades it is considered a capital improvement. NJ says if it is fixed in the wall and can't go with you when you move then no tax. If you can move it then tax it, and the services are tax free if it's a capital improvement. Now on the other hand you are ALWAYS supposed to pay tax on your products when you purchase them. So if your distributor or mfg cannot collect the sales tax then you need to pay use tax on the item. So if the item costs you $100 here in NJ your real cost should be $107. Then you do your percentage mark up from there. That is how you get around the client knowing the real price. The problem is that in our tight market people see you charging more for each line item and that would be because of sales tax on the materials.

With all that said I am still confused on how to charge people sales tax properly so that I will not get in trouble when audited.