Admin Tools: Sales Tax

The Sales Tax option in the System category of Admin Tools is used to set up a state's sales tax for services provided by a staffing company. Currently, not all states require sales tax on services rendered.  If employees are placed at work site addresses in states where sales tax is required, sales tax should be configured for each state as described below. 

For each of the setup sections below, navigate to Start Page > Actions Menu > Admin Tools > Category = System > Sales Tax to display the System | Config Sales Tax window.

Note: The first tab, Sales Tax, must be configured before the other tabs' information will go into effect.

State sales tax configurations may already be defined on the default Sales Tax tab. Review the setup for each state and adjust as necessary. 

Note: New Calc Method (04/28/2023) for Alaska (AK) calculates only on the first $500 without exceeding $35 "per sale" [Per Sale = Per Authority / Per Invoice]. This option does not support dual sales tax. An option is to combine if multiple authorities are required.

• Flag Requires sales tax for supplier Admin Tools > Employer > Locality/Country
• Configure Sales tax to the Customer / Order is where the worksite address is that determines the State of the Sales Tax Customer > Edit Customer [detail] > See All [by Address Type] > Sales Tax - Only AK configured Sales taxes should show

Sales Tax Tab

Note: The first tab, Sales Tax, must be configured before the other tabs' information will go into effect.

1. Click Add New in the Sales Tax tab. The Config Sales Tax and Sales Tax Rate group boxes are cleared to show blanks and default values.
   
   
   
2. Complete the Config Sales Tax fields according to these definitions.
   

   Field	Description
   Name	A name that describes the tax rate. This name will appear when a tax rate is assigned to a customer's work site address in the Customer section.
   Description	Additional information to describe the new sales tax configuration.
   State	The state to which this configuration will apply.
   CalcMethod	Select one of the following calculation methods dbo.bil_ProcessSalesTax_Default - should be used for exempt rates. Use for a straight percentage sales tax (total sales x tax rate). The states of Connecticut and Washington currently use this method. dbo.bil_ProcessSalesTax_PA - use if sales tax is calculated on gross profit (gross profit x tax rate). This method currently just applies to the state of Pennsylvania. dbo.bil_ProcessSalesTax_SkillCode - use if the state requires sales tax to be applied to only particular skill codes. If you choose this method, you must complete the setup described in Indicating skill codes that require sales tax. dbo.bil_ProcessSalesTax_State - use if sales tax is calculated on a state rate as well as county-specific rates (total sales x state rate + total sales x county rate). This method currently applies only to the state of Ohio. dbo.bil_processSalesTax_AK - Certain cities and boroughs charge sales tax and some of the cities and boroughs have a taxable amount limit. This method currently applies only to the state of Alaska. dbo.bil_ProcessSalesTax_GrossMargin - Gross Margin means net sales minus cost of goods sold, in this situation the tax is calculated on the difference between the bill amount and employees' wages paid to them. This method currently applies only to the territory of Puerto Rico.

Sales Tax Rate

The state's sales tax rate is entered into the Rate (%) column.

Note: If the configuration is being set up for a state that uses an individual state rate, the rate must be set up on the Sales Tax State Rate tab. Any rate entered here will be ignored.

Start Date

The date on which the tax rate will apply. By default, the Start Date is the first day of the current year. In 2024, the Start Date will default to 1/1/2024.

End Date

The date on which the tax rate will no longer apply. By default, the End Date is set to the last day of the year twenty years into the future. In 2024, the End Date will default to 12/31/2043. 

1. Click Save. Repeat these steps to complete the sales tax setup for additional states. 

Deleting a Sales Tax Rate

When deleting a Sales Tax Rate, the user will experience a notification to ensure the user wants to proceed with deleting a Sales Tax Rate.

Right-click > Delete Sales Tax Rate:

"Are you sure" notification:

In the circumstances of a Sales Tax Rate that is associated with processed transactions, the user will experience a notification that will not allow them to delete that Sales Tax Rate.

Deletion prevented:

Tax-Exempt Customers

A 0% tax can be created and applied to tax-exempt customers. 

1. Click Add New in the Sales Tax tab. The Config Sales Tax and Sales Tax Rate group boxes are cleared to show blanks and default values.
2. Complete the Config Sales Tax fields according to these definitions.
   

   Field	Description
   Name	A name that describes the tax rate. Include the word "EXEMPT" to identify the rate as tax-exempt. This name will appear when a tax rate is assigned to a customer's work site address in the Customer section.
   Description	Additional information to describe the new sales tax configuration.
   State	The state to which this configuration will apply.
   CalcMethod	Only dbo.bil_ProcessSalesTax_Default should be used for exempt rates. dbo.bil_ProcessSalesTax_Default - use for a straight percentage sales tax (total sales x tax rate). This method is currently used by the states of Connecticut and Washington.
   Sales Tax Rate	Enter a "0" into the Rate (%) column. Note: If the configuration is being set up for a state that uses an individual state rate, the rate must be set up on the Sales Tax State Rate tab. Any rate entered here will be ignored.
   Start Date	The date on which the tax rate will apply. By default, the Start Date is the first day of the current year. In 2018, the Start Date will default to 1/1/2018.
   End Date	The date on which the tax rate will no longer apply. By default, the End Date is set to the last day of the year twenty years into the future. In 2018, the End Date will default to 12/31/2037.

3. Click Save. Repeat these steps to complete the sales tax setup for additional states. 

Sales Tax Transaction Types Tab

The Sales Tax Transaction Type tab is used to identify transaction types that are subject to state sales taxes as well as which are "pass-through" (deductible) types. This setup must be done for all sales tax configurations.

1. Click the Sales Tax Transaction Type tab.
   
   
   
2. Select a state sales tax configuration from the list of existing configurations.
3. Select a transaction type from the Sales Tax Transaction Type group box.
4. In the Is Deduction column, check the corresponding checkbox if the type is a deduction.
5. In the Select column, check the corresponding check box if the type is to be included in the sales tax calculation.
6. Click Save when finished. Repeat the steps for additional transaction types. 

Sales Tax Skill Code Tab

In some states, particular skills may be subject to sales tax. If the state requires taxes for particular skills, complete this tab. The state must be set up with a processing method of dbo.bil_ProcessSalesTax_SkillCode.

1. Click the Sales Tax Skill Code tab.
   
   
   
2. Select the sales tax in the list to work with.
3. In the Sales Tax Skill Code area, place a checkmark in any Select column check box corresponding to taxable skills.
4. Click Save when finished.

Next Step: To set up the new skill code to make sales tax calculate, you will associate this sales tax with the Customer in Customer > Address Sales Tax. Then, during the Billing process, any orders/assignments from this customer with a Skill Code/ Job Title that you designated in Admin Tools Setup, will generate tax. 

 

Sales Tax State Rate Tab

For states that have a state sales tax rate, the Sales Tax Rate tab.

1. Click the Sales Tax State Rate tab.
   
   
   
2. In the Config Sales Tax Rate State group box, modify the rate as needed.
3. In the Sales Tax Rate State County group box, review and update the county rates as necessary.
4. Click Save.