This is a set-up module that must be completed before any customers are entered in the Customer Maintenance module. Thereafter, this module will be used to add or change Sales Tax Codes, when applicable. Following this section is an explanation of an automated Sales Tax update option that you can add to your system for an additional annual subscription.
Before you can begin using the BMS System, you will need to set up a Sales Tax Code for every type of sales tax that you collect and report/pay to your state government. The number of Tax Codes you set up depends on how your state government wishes you to remit those taxes—separated or not separated. (Before you begin, make sure you have a G/L liability account number set up for each classification of sales tax that you collect.) As an example, if you have a state (let’s say Tennessee) tax of 4% and a county (let’s say Williamson) tax of 2% for a total of 6% sales tax that needs to be collected on every sale, does the State want to see a breakdown of the 4% and 2% or does it just want a report on the total 6%? If the State does want a breakdown, you will need to create at least two Sales Tax Codes such as the following: “TN” for Tennessee, and “WL” for Williamson County. If the state does not want the information broken down, then you can create just one Sales Tax Code for the state such as “TN” for Tennessee. One additional Sales Tax Code that you should create is an Exempt tax code. This code should have a zero percentage. Use “EX” or “EXT” as the code. All tax-exempt customers should be set up with this Sales Tax Code.
When you enter this module, the system will prompt a Sales Tax Code Maintenance screen as follows:
At the Tax Code (1) field, if you click the Tax Code button, the system will prompt a list of existing Sales Tax Codes. To add a new one, create a one to eight-digit alphanumeric code to identify the Sales Tax Code you are adding—it is best to use letters that closely identify the county, city, or state. At the Tax Jurisdiction (2) field, type in a description of the Sales Tax Code, up to 40 characters (e.g., Tennessee State Tax) and hit enter to continue. However, if you click the Tax Jurisdiction button, the system will prompt a “wild card” type search for an existing Tax Jurisdiction (description). When you click the Tax Jurisdiction button, the system will prompt a Tax Code Jurisdiction Look-Up box as follows:
In the blank Tax Jurisdiction field above, you can type a few letters of the tax code you wish to locate and then click the Wild-Card Search button. The system will then display all occurrences of those letters to allow you to scroll and search for the desired Tax Code. You can double-click on the desired Tax Code to load into the maintenance screen, or highlight and then click the Accept button. Please Note: this new Tax Code Jurisdiction Look-Up screen is also available anywhere in the system where you can perform a Tax Code lookup.
At the Tax Percent (3) field, type in the tax percentage amount applicable to the Tax Code. You have up to six characters, which means you can have three to four spaces after the decimal if applicable. For your Exempt Sales Tax Code, leave “.000” in this field. The Contract Tax Percent (4) field can be used if your Use Tax percentage or Contract Tax percentage is different from your regular Sales Tax percentage. The G/L Account (5) field is tied to the system General Ledger. Type in the Sales Tax Liability Account Number that applies to the Sales Tax Code you are adding, or click the G/L Account button to prompt a G/L Account Selection box. This is a required field of entry and the account must be set up in the system before you can type or select that number in this field. (See Account Maintenance/Inquiry in the General Ledger manual for information on setting up G/L accounts.) At the Zip Code (6) field, you will only use this if you have to report by Zip Code and then each Tax Code can have its own zip code for reporting purposes. If this is not applicable, leave this field blank.
You can also set a Tax Code to an Inactive (7) status by checking that box on an existing Tax Code. When the Tax Code Selection box is called up from anywhere in the system, an “Inactive” column will appear as follows:
The system will not allow you to select an Inactive Sales Tax Code from the Customer Maintenance module. Two additional options pertain to functionality for Canadian Customers. These two GST and PST checkboxes allow for creating Tax Codes that don’t need to contain the text “GST” and “PST” in the Code name. Also, Canadian customers can now operate in multiple Provinces within the same Company. Because of the importance of proper setup, any Canadian client wishing to switch to this optional method of Tax setup should contact BMS at info@rmaster.com for assistance. A second change for Canadian Dealers deals with grouping Tax Codes together in Regions, rather than defaulting from Branch setup. Please Note: It is recommended that a BMS Trainer assist with this set up. Please send an email to info@rmaster.com for assistance.
When you have finished adding a Tax Code, be sure to click the Save button prior to exiting the Sales Tax Code Maintenance screen to save any changes. When using either the Delete or Save buttons, the system will keep you in the screen above so you can continue to add, delete, or edit without having to re-enter the module.
Two additional options in this module can be found at the top left of the screen. If you click the Print option, the system will print a list of existing Sales Tax Codes. You can also export this data to Excel. If you click the Functions menu option, the system will prompt the following option: Replace Sales Tax Codes. When you select this option, a box will appear as follows:
This functionality is designed to allow you to replace an existing Sales Tax Code with a new one on all existing Customer accounts. In the Old Tax Code (1) field, type in the existing old tax code. In the New Tax Code (2) field, type in the new applicable Tax Code. At the Make sure new tax code is in tax code 1 for all customers (3) field, if checked, this will be a blanket change for all Customers, so be sure this is the outcome you are wanting before checking this option and then clicking the Continue button. At the Sales Territory (4) field, the default is set to **All**. To replace Sales Tax Codes for a specific Territory, use the drop-down menu to make that selection prior to clicking the Continue button. Please Note: if you need to delete a tax code entirely, you will need to contact BMS Customer Support for assistance.
Tax Rate Changes after going “live” on BMS: When a rate change is made on an existing Tax Code, as soon as you enter into a Job or Quote, the system will automatically recalculate the tax data at that time, so even closed Quotes that are reused will also be handled properly. Additionally, the system will also re-check tax rates on Line Items prior to Invoicing, so if a tax rate change is made after a Job is entered, the system will automatically adjust for the change prior to Invoicing. Additionally, if a new tax rate is selected on a “Ship To Code,” the system will automatically recalculate the tax on any existing Line Items so you will not need to re-enter through each line. The tax rate is stored at the point of Invoicing, so that all Job Costs will remain unchanged and any Credit Memos will be handled properly using the tax rate on the job at the time of Invoicing.