User Tools

Site Tools


dynamiczip:faq:items_partially_taxable_faq

Differences

This shows you the differences between two versions of the page.

Link to this comparison view

dynamiczip:faq:items_partially_taxable_faq [2015/04/28 17:05]
127.0.0.1 external edit
dynamiczip:faq:items_partially_taxable_faq [2017/09/07 22:04] (current)
conni
Line 1: Line 1:
 ====== How do I handle items that are partially taxable? ====== ====== How do I handle items that are partially taxable? ======
 +
 Some states tax certain items at a percentage of the normal rate or tax only a portion of the sales amount for a particular item.  Some states tax certain items at a percentage of the normal rate or tax only a portion of the sales amount for a particular item. 
  
Line 5: Line 6:
  
 ====Solution 1====  ====Solution 1==== 
 +
 Company A needs to charge only 50% of the normal tax rate (or tax only 50% of the sales amount, the effect is the same) on widgets sold in Illinois, but must continue to collect the normal amount of taxes on other items (and on widgets sold in other states). Company A only collects state sales taxes. In order to collect the proper amount of taxes, Company A splits the state tax detail in two. Since Illinois taxes sales at the rate of 6.25%, they create two details, ILSTATE50-1 and ILSTATE50-2 - each with a tax rate of 3.125%. They then create two custom tax schedules - ILSTATE50, which contains the detail ILSTATE50-1,​ and ILSTATE100, which contains both custom details. ​ Company A needs to charge only 50% of the normal tax rate (or tax only 50% of the sales amount, the effect is the same) on widgets sold in Illinois, but must continue to collect the normal amount of taxes on other items (and on widgets sold in other states). Company A only collects state sales taxes. In order to collect the proper amount of taxes, Company A splits the state tax detail in two. Since Illinois taxes sales at the rate of 6.25%, they create two details, ILSTATE50-1 and ILSTATE50-2 - each with a tax rate of 3.125%. They then create two custom tax schedules - ILSTATE50, which contains the detail ILSTATE50-1,​ and ILSTATE100, which contains both custom details. ​
  
Line 20: Line 22:
  
 ====Solution 2==== ====Solution 2====
 +
 Handling this situation becomes more complicated when county and city sales taxes must also be collected. In this case, a statewide tax schedule would not work. Instead, a custom tax schedule would be used for the widget inventory items while all other items would use [[dynamiczip:​glossary:​Zip Code Tax Schedule]]. ​ Handling this situation becomes more complicated when county and city sales taxes must also be collected. In this case, a statewide tax schedule would not work. Instead, a custom tax schedule would be used for the widget inventory items while all other items would use [[dynamiczip:​glossary:​Zip Code Tax Schedule]]. ​
  
Line 41: Line 44:
  
 ====Solution 3==== ====Solution 3====
 +
 If widgets in Illinois are not subject to the general state, counties, or cities sales taxes but are taxed by a special Illinois widget tax, then a custom tax schedule and detail need to be used for all widget sales in IL. If widgets in Illinois are not subject to the general state, counties, or cities sales taxes but are taxed by a special Illinois widget tax, then a custom tax schedule and detail need to be used for all widget sales in IL.
  
dynamiczip/faq/items_partially_taxable_faq.txt ยท Last modified: 2017/09/07 22:04 by conni