Sales Tax
The Sales Tax feature is exclusive to the USA. You need to have your organization set to U.S.A to make use of this feature. Below are a list of operations you can perform with sales tax.
- Enabling the Sales Tax
- Creating a New Tax
- Creating a New Tax Group
- Creating a New Tax Exemption
- Creating a New Tax Authority
- Editing a tax
- Deleting a tax
- Default tax
- Associating tax for a customer
- Making a customer non-taxable
Enabling the Sales Tax
To enable sales tax for your organization,
- Navigate to gear icon > Taxes.
- Click on Enable Sales Tax button to enable sales tax for your organization.
Creating a New Tax
To create a new tax,
- Navigate to gear icon > Taxes.
- In the Taxes screen, click on + New Tax.
- Enter the required details and click on Save.
Creating a New Tax Group
To create a new tax group,
- Navigate to gear icon > Taxes.
- In the Taxes screen, click on + New Tax drop-down and select New TaxGroup.
- Enter the tax group name and select the desired taxes to be clubbed together using the checkbox.
- Click Save to add the new tax group.
Creating a New Tax Exemption
You can create new tax exemptions for customers and items. E.g. Child care and non-profit organizations are exempt from taxes.
- Navigate to gear icon > Taxes.
- In the Taxes screen, click on + New Tax drop-down and select New Tax Exemption.
- Enter the exemption reason and description.
- Choose the required type (customer or item) and click Save.
Creating a New Tax Authority
To create a new tax authority,
- Navigate to gear icon > Taxes.
- In the Taxes screen, click on + New Tax drop-down and select New Tax Authority.
- Enter the tax authority name and description.
- Click Save.
Editing a tax
To edit a tax,
- Navigate to gear icon > Taxes.
- Hover over the tax you’d want to edit and click on the edit icon at the far end.
Deleting a tax
To delete a tax,
- Navigate to gear icon > Taxes.
- Hover over the tax you’d want to delete and click on the trash icon at the far end.
Default tax
The Default Tax will be used in transactions when tax preference (Taxable/Tax Exempt) is not set for the involved customers. The first tax you create will be marked as the Default Tax initially. However, you can mark a different sales tax as default as well.
Default Tax can be useful for the following scenarios.
When customers are imported into Zoho Subscriptions, their tax preference is not set. When these customers are involved in transactions, the Default Tax will be applied in those transactions.
The tax preference will also not be set for customers who were created before sales tax was enabled. Here again, the Default Tax will be used in transactions where these customers are involved.
Default Tax is not automatically associated with a customer. It is only used when tax preference (Taxable/Tax Exempt) is not set for the involved customers. You can set the Tax Preference of a customer at anytime.
To mark a different tax as default,
- Navigate to gear icon > Taxes.
- Hover over the tax which you it to be default and select mark as default.
Associating tax for a customer
Let’s say, your customer resides in Utah where a sales tax rate of 4.7% applies. Read below to find out how you can associate this rate to the customer.
- Go to the Customers tab.
- After filling in customer details, scroll down to the Tax Type label and ensure that Taxable is checked.
- Select the required tax rate for customer from the drop down box adjacent to the Tax Rate label.
Making a customer non-taxable
There might be occasions where your customer is a non-profit organization which is exempt from tax. You can make a particular customer non-taxable by following the below steps.
- Go to the Customers tab.
- After filling in customer details, scroll down to the Tax Type label and ensure that Non-Taxable is checked.
- Enter the Exemption Reason and Tax Authority and click on Save.
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