Tabs3 gives you the ability to assess sales tax on amounts billed. Flexibility has been built into the software, allowing you to select which portion of the charges billed you want taxed. This is an important feature because each state has different sales tax laws that may change at any time.

Sales tax is calculated at the time the statement is processed (i.e., printed, previewed or saved to a disk file). The following describes how Tabs3 handles sales tax:

System Level

The Rates tab in Tabs3 Customization allows you to specify if you want sales tax charged on services. If the Tax Services check box is cleared, no sales tax can be charged on services. You are also able to specify if you want sales tax charged on expenses. If the Tax Expenses check box is cleared, no sales tax can be charged on expenses. You are also able to specify if you want sales tax charged on advances. If the Tax Advances check box is cleared, no sales tax can be charged on advances.

If you select any combination of the tax options, you will be allowed to specify up to nine different sales tax rates. This can be especially important if your firm provides services in states or cities that require different tax rates.
Client Level Each client is assigned a separate default sales tax rate code for fees, expenses and advances on the Billing Options tab of the Client file. The sales tax rate code is a number from 0-9. Zero indicates that no sales tax is to be charged. A sales tax rate code of 1-9 indicates the default rate to be used (from Customization) when assessing sales tax. You may have clients that are tax exempt or require different sales tax rates.
Tcode Level When setting up the transaction code file, each transaction code can be set up to assess sales tax. This is important because some states require sales tax to be assessed only on specific services or costs, but not on others.
Fee and Cost Transaction Level

Regardless of the defaults assigned at the client level or transaction code level, you can always change the sales tax rate at the individual fee and cost transaction level. You have total control over exactly which transactions are to be taxed, and at which rate.

If you need totals of billed taxable fees, fee tax, taxable expenses, expense tax, taxable advances and advance tax by sales tax rate, print and save the Statement Run Totals.

Note: During data entry for task based billing clients, a combination of Phase/Task code and Activity/Expense ID is used instead of a transaction code. Therefore the default sales tax rate for the transaction is determined by the sales tax rate code of the transaction code assigned to the Activity or Expense ID code.

Note: Sales tax will print on a statement if any item in a transaction group (fees, expenses, or advances) is set as taxable, even if the taxable amount is zero.

Note: If you need to assess the Canadian Goods and Services Tax, call Technical Support for details.

Note: Credits are applied before tax calculations, which can affect how taxes due are shown in some cases. Refer to Knowledge Base Article R11760, “Best Practices When Applying Credits” for more information.

See also:   Sales Tax Examples
  Knowledge Base Article R10952 - Using Sales Tax in Tabs3