Configuring Sales Tax

When configuring your sales tax in opentaps you may notice some complexities. This is necessary because the tax structure itself is complex, and unfortunately supporting it is actually getting more difficult with recent changes in the law. opentaps makes provisions for the following types of considerations.

Sales tax is a consumption tax charged at the point of purchase for many goods and services. The tax is usually a percentage of a sale that is set by the governments charging the tax. There is usually a long list of exemptions for specific products or services (that change all the time). The tax can be included in the price of goods sold(tax-inclusive) or added at the point of sale (tax-exclusive) according to your local tax jurisdiction's rules.

There are several kinds of sales tax. A retail sales taxes is collected from the final end purchaser of a good or service by the seller for payment to a tax authority. For the purchasers who are resellers, not the end users, it is necessary to have a sales tax exemption called a "resale certificate" which the purchaser can produce for the seller. Thus, the tax is actually charged on each item sold to purchasers who do not produce such a certificate.

Another type of sales tax is the value added tax which is charged on all sales, thus avoiding the need for some kind of exemption. Tax cascading is avoided by permitting the seller to remit to the government only the difference between the tax charged on their sale to the purchaser and the tax paid by the seller to its suppliers. (Thus, they are paying tax on their own "value added" contribution).

Most countries in the world have sales taxes or value added taxes at all or several of the national, state, county or city government levels. As you configure sales tax for your business, you will notice the provisions made in opentaps for all of these variations or complexities.

Currently opentaps makes provisions for these taxes using two different options for your implementation:

   1.  Implementing with a Tax Authority model which is a very general approach.
        To pursue this method go to Setting Up Taxes with Tax Authorities.
 
   2.  Implementing with Zip Code to Geography mapping tables useful in some localities.
        To pursue this method go to Setting Up Taxes with Zip Code Mapping.

Manual pages >> Setting Up Taxes with Tax Authorities

Section pages >> Facilities Setup: Stores, Warehouses, Shipping