How to Update Your Sales Tax Codes when the Rates Change

Modified on: 2017-11-29 15:38:37 -0500


The sales tax rate must be changed in your Design Manager Software for each project that is still open and will be billed at the new rate. We strongly suggest creating a new Sales Tax Code for the new rate each time the rate changes, rather than changing the rate in the code as it will facilitate potential void and re-billing of prior period invoices if necessary. It will also show anything billed at the old rate and anything at the new rate separately on the sales tax report.  The old Sales Tax code can be made inactive after it is no longer used.

To correct an invoice that was produced prior to the rate change (was made using the old rate by mistake) will need to be credited (reversed) and re-billed on the same date in the previous period.

**Please Scroll down for Pro Cloud/Pro 7**

TO CHANGE A RATE IN THE STANDARD/CLOUD VERSION:

To add a new a sales tax code for the new rate, take the following steps:

  1. First add the new code
  • Go to the Glossaries menu (above the Employee Time Icon) at the top of the screen
  • Click on Sales Tax Codes
  • Click Add
  • Choose a code of up to 5 characters for the particular tax area ? i.e. for a new code in San Diego, a suggestion would be SD8 for San Diego 8.00% then hit the tab key
  • Enter a description: i.e. San Diego 8.00%
  • Enter the State Abbreviation: i.e. CA for California
  • Click on the Add button
  • Enter the Authority name - in this case, State Board of Equalization
  • Click in the Merchandise box and type 8.00 - in this example (substitute the rate for your area) and hit tab. The other fields will populate with the same number. In this example, you will leave these as they are - for other states, you may be required to change the %'s, depending on the taxable rates for each component type.
  • Leave the Total button checked. In other states you may need to make a different selection
  • Leave the Calculate on Unit Price box UNCHECKED unless you wish to have the sales tax calculated on each item separately. Most designers in California would not use this option. See the help file for an example if necessary or contact support@designmanager.com for help if necessary.

** NOTE: Do not be concerned about the rate % showing in the Install/Labor, Design Fee and Time boxes - that will be handled in the next screen

  • Click the OK Button
  • Make sure the Sales Tax Withholding Account Field is completed. To check the account, click in the field and click the search button. Verify that the account shown is the Sales Tax Collected Account and click Choose.
  • Do NOT Click the Inactive Box
  • Review the Taxable Defaults choices for the component types and uncheck the boxes as necessary. Usually, designers will uncheck the Install/Labor, Design Fee and Time boxes but not in every situation. If you are unsure, check with your tax advisor.
  • Click Ok to return to the Sales Tax Code Glossary Window. Click Add, if necessary to enter additional codes for other areas that may have changed as well.
  • Click Close
  1. Change the Sales Tax Code in the project file
  • Open the Projects and Specifications Window
  • Highlight a project name and double click or click edit
  • Click in the Sales Tax Code field in the bottom left corner of the window and then click the search button (magnifying glass)
  • Select the new Sales Tax Code you just created from the list and click choose
  • Click OK
  1. Repeat the process in #2 above for each project that needs to be changed
  1. When producing the next invoice, check the sales tax calculated to make sure it is the right % before Accepting the Invoice. If the rate is not correct, double check that the code in the project window is correct.


TO CHANGE A RATE IN THE PROCloud/Pro7 VERSION:

  1. First add the new code
  • Go to the Glossaries menu (above the Reports Icon) at the top of the screen
  • Click on Sales Tax Codes
  • Click Add
  • Choose a code of up to 5 characters for the particular tax area: i.e. for the new code in San Diego, a suggestion would be SD8 for San Diego 8.00% and hit the tab key
  • Enter a description: i.e. San Diego 8.00%
  • Enter the State Abbreviation: i.e. CA for California
  • Click on the Add button
  • Enter the Authority name - in this case, State Board of Equalization
  • Click in the Merchandise box and type 8.00 - in this example (substitute the rate for your area) and hit tab. The other fields will populate with the same number. In this example, you will leave these as they are - for other states, you may be required to change the %'s, depending on the taxable rates for each component type.
  • Leave the Total button checked. In other states you may need to make a different selection
  • Leave the Calculate on Unit Price box UNCHECKED unless you wish to have the sales tax calculated on each item separately. Most designers in California would not use this option. See the help file for an example if necessary or contact us for help if necessary.
  • Leave the Print Separate on Invoice Box UNCHECKED unless you are using the Calculate on Unit Price selections. If you choose to use this feature, you can also choose to show the tax on a separate line for each unit

** NOTE: Do not be concerned about the rate % showing in the Install/Labor, Design Fee and Time boxes - that will be handled in the next screen

  • Click the OK Button
  • Make sure the Sales Tax Withholding Account Field is completed. To check the account, click in the field and click the search button. Verify that the account shown is the Sales Tax Collected Account and click Choose.
  • Do NOT Click the Inactive Box
  • Review the Taxable Defaults choices and uncheck the boxes as necessary. Usually, designers will uncheck the Install/Labor, Design Fee and Time boxes but not in every situation. If you are in doubt, check with your tax advisor
  • Click Ok to return to the Sales Tax Code Glossary Window. Click Add, if necessary to enter additional codes for other areas
  • Click Close
  1. Change the Sales Tax Code in the Project file
  • Open the Projects list from the Projects Menu
  • Highlight a project name, double click or select on the edit button
  • Click in the Sales Tax Code field in the bottom left corner of the window and then click the search button (magnifying glass)
  • Select the new Sales Tax Code from the list and click choose
  • Click OK
  1. Repeat the process in #2 above for each project that needs to be changed
  1. When producing the next invoice, check the sales tax calculated to make sure it is the right % before Accepting the Invoice. If the rate is not correct, double check that the code in the project window is correct.

The "inactive" box in the Sales Tax Code add/edit screen should only be used when a code is not expected to be used in the future. We suggest leaving the old code active for a several months in case you need to void and re-invoice a billing. After a certain amount of time, the code can be made inactive to avoid use of. To reopen an inactive code, go back to the Sales Tax Glossary window, click show Inactive. Edit the inactive code and remove the check mark.




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