Setting up tax codes

Tax codes are used to track tax paid to and by your business. Each tax code represents a particular type of tax, which is used to calculate tax on your transactions.

Your MYOB software has an extensive list of tax codes that can be used in a variety of situations—for example, when doing business with overseas customers, when tracking capital acquisitions and so on.

Summary of tax types

When you create a tax code, you need to select which type of tax it is. There are three tax types you can choose from. The table below describes what each tax type is for.

 

Tax Type	Description
Consolidated	This tax type is used for taxes that are made up of two or more tax codes or sub-taxes. You would use this code if, for example, the 8% tax rate you record on sales is the combined total of a 5% state sales tax rate and a 3% city sales tax rate. For more information see below.
Import Duty	This tax type should be used by importers bringing goods into the United States from other countries. Tax codes with this type are used to record the import duty payable on a purchase without changing the total amount of the purchase.
Sales tax	This tax type is associated with the tax recorded on sales and purchases of goods and services.

 

Consolidated tax codes

You can create consolidated tax codes by combining two or more tax codes. For example, the CST tax code (with an 8.25% tax rate) is composed of CTY (City Sales Tax) at 4%, STE (State Sales Tax) at 4%, and MET (Metropolitan Tax) at 0.25%.

note : You can only consolidate tax codes that are in your tax code list

Make sure you first create the tax codes you want to consolidate. The rest of the fields are filled in for you and the consolidated tax rate is calculated automatically.

To create a tax code

1	Go to the Lists menu and choose Tax Codes. A list of tax codes appears.

2	Click New. The Tax Code Information window appears.

3	In the Tax Code field, type a code (up to three characters) for the new tax and press Tab.

4	Complete the other fields in this window.

A	Enter a description, type, and rate. If you selected Consolidated as the Tax Type, see Consolidated tax codes.
B	If the Tax Type is Sales Tax, select the linked account for tax collected. If the Tax Type is Import Duty, select the linked account for accrued duty. Select a card that you want to link to this tax code, if applicable.

5	Click OK when you have finished. The new tax code you created will now appear in your tax codes list.

To change the details of a tax code

If a tax rate changes or if you wish to link a tax code to a different account, you can change the tax code information.

1	Open the tax code you want to edit in the Tax Code Information window.

2	Make the required changes and click OK.

To delete a tax code

A tax code can only be deleted if it's not in use on a sale, purchase, or check transaction.

1	Open the tax code you want to delete in the Tax Code Information window.

0	Go to the Edit menu and choose Delete Tax Code.

Related topics

■	Adding a record