Sales Tax on Purchase Orders

Owned by Paul Hitchcock
Sept 28, 2020
2 min read

POs store a link to the Tax Rate, so if a Tax Rate is modified it will modify all linked POs. It is advisable to use a Date in the description of a Tax Rate so that if you can identify it when you need to update Tax Rates due to changes in the rates. Example: “Sales Tax 2019”

Creating a Tax Rate

  1. Open the ‘PO Item Tax Rate’ window used to select a Tax Rate. You can open this by clicking on the Tax Rate field in the header of any PO or any other place where you select a PO Tax Rate.

  2. Right-click the list of Tax Rates and click or hover over ‘Add’ to open the textbox to the right of ‘Add’.

  3. Enter in a name for the Tax Rate in the textbox then press Enter to save it. The Tax Rate Components window should open so you can define the Tax Rate. If running an older version, you may need to right-click the new Tax Rate and click Edit Components.

  4. In the Edit Components window click ‘Add Component’ to add one or more Tax Rates that comprise the total Tax Rate. For example you may have a City, County and State sales tax that combines to the total Sales tax Rate. You can add them individually in this step if desired.

  5. Click OK to save the Tax Rate

Selecting a Tax Rate on a PO

Click on the Tax Rate link in the PO Header and select one of the configured Tax Rates. A Tax Rate selected in the header of a PO will affect all PO Items on the PO unless a different Tax Rate is selected on the PO Item itself.

Selecting a Tax Rate on a PO Item

Click on the link in the Tax Rate column on a PO Item to select one of the configured Tax Rates. A Tax Rate selected here will override the Tax Rate selected in the header of the PO.

You can create a Tax Rate with no components and name it Tax Exempt or similar and use it to set the Tax Rate to zero for specific line items.

Setting a Vendor’s Default Tax Rate

On the Business form, on the Vendor tab, you can set a default Tax Rate. This Tax Rate will be automatically selected on a PO when the Business is selected as the Vendor on that PO.