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How do I create custom tax schedules?
DynamicZip provides certain tools to assist with the maintenance of non-standard tax schedules. If the Tax Details and Tax Schedules automatically created by the Rate & Boundary Import do not work for your tax situation, then the use of these tools and procedures may be helpful to you.
DZ State Setup provides a way to exclude from import specific levels of taxation for the entire state. For example you could exclude all city and city local taxes for the entire state simply by selecting the appropriate check boxes and then running the Import of the sales and use tax database. (It is during the import process that the changes are actually made.) This feature is only available in build 60 and later.
DZ Modify Tax Schedules provides a way to add or remove tax details meeting your specified criteria to/from a range of tax schedules meeting your specified criteria. For example, you could remove all county tax details from all Exempt Tax Schedules. (In this case, the change is made immediately by running this process.)
DZ Modify Tax Details provides a way to modify a range of tax details. This window is based on the idea of rolling out a specific change to a range of tax details. This means that a detail will only be changed if it falls in the range between the Starting Detail ID and the Ending Detail ID and if its beginning value matches the tax detail ID selected.
DZ Modify Detail Supplement provides a way to govern the degree to which the import of the sales and use tax database modifies the tax details and/or the tax schedules to which the details are assigned. This feature is only available in build 60 and later.
During the Rate & Boundary Import process the Zip Code Tax Schedules for the states that are being imported might be added, modified or deleted by the process. Therefore, you should not create custom tax schedules that DynamicZip might identify as a Zip Code Tax Schedule. (Unless it is based on a ZIP code for a state that you do not import from the Rate & Boundary Database. ) There are two settings on the DynamicZip Setup window that may prove helpful should you need to use a custom tax schedule in a state where you normally use Zip Code Tax Schedules.
For reporting purposes please review the information on Custom Tax Details.
Sample scenario:
Monster Zinc, Inc. is subject only to the Colorado state tax throughout most of Colorado. However, they are subject to city, county, and state tax in a few select cities in Colorado.
Solution #1
This solution is the simplest to implement but it must be repeated each time Monster Zinc, Inc. imports the sales and use tax database for the state of Colorado. An alternative to importing Colorado would be to manually change the tax rates as required.
Import the sales and use tax database for the state of Colorado to create all the details and schedules for the state.
Use DZ Modify Tax Schedules to remove all but the state tax details from all tax schedules in the state except for the cities in which Monster Zinc is required to collect full tax.
Solution #2
This is probably a better solution since it will be handled more automatically in conjunction with future imports of the sales and use tax database. It also maintains the ability to identify Jurisdictions into which sales are made. However, it still doesn't deal with the possibility that new taxes may be implemented in future issues of the sales and use tax database. The new taxes will be added to the tax schedules to which they apply. This process will then need to be implemented for them as well.
Import the sales and use tax database for the state of Colorado to create all the details and schedules for the state.
Use DZ Modify Detail Supplement to set the Import Status to Schedule for all of the county, county local, city, and city local tax details in Colorado that Monster Zinc is not required to collect. This will prevent the future import of the sales and use tax database from modifying these tax details. Set the tax rate to zero for all of the county, county local, city and city local tax details in Colorado for which Monster Zinc is not required to collect. Unfortunately DynamicZip™ does not currently contain a tool to assist with this process.
Use DZ Modify Detail Supplement to set the Import Status to Detail for the county and county local details in which tax must be collected in certain cities but not in others. This will prevent the future import of the sales and use tax database from adding or removing these tax details to or from tax schedules.
Use DZ Modify Tax Schedules to remove the county and county local details in which tax must be collected in certain cities but not in others from all tax schedules except those in which Monster Zinc is required to collect the tax.
Both solutions have their advantages and disadvantages. Monster Zinc's choice should take into account how many cities tax must be collected in. Solution #1 followed with manual modifications to the tax rates as required rather than continuing to import the sales and use tax database for Colorado may be the best choice.