CenterPoint^® Accounting - Understanding and Using Sales Tax Categories

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Sales tax categories provide a way to group various sales (inventory) items for tax calculations. You determine if the sales tax category is taxable by selecting the sales tax jurisdictions to apply. If all of your items taxes are calculated at the same rate, then only one Sales Tax Category is needed.

Example: A store sells food, fuel and general merchandise. According to state & local tax laws for their area they need to calculate:

1. State sales tax on all general merchandise but not on food.
2. An additional local sales tax on all general merchandise and food.
3. State sales tax on fuel at a different rate then general merchandise fuel will be taxed at a different rate.

This can easily be done by setting up three separate sales tax categories (food, general merchandise and fuel) and assigning the appropriate sales tax category to the items.

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Creating a Sales Tax Category:

1. Select Setup > Sales > Sales Tax Categories.
2. Click on the New button.
3. Assign an Abbreviation and Name for this sales tax category.
4. All Sales Tax Jurisdictions are listed in the box below. Put a check in the box for each jurisdiction that should calculate tax on the items assigned to this Sales Tax Category.
5. Click Save.
6. Repeat steps 1-5 for each sales tax category needed.

Assigning a Sales Tax Category to an Item:

1. Select Setup > Sales > Sales Items or Setup > Inventory > Items.
2. To change the Sales Tax Category on an existing Item, select the item and click Edit.
3. In the Sales Tax Category field, select the appropriate sales tax category for this item.
4. Click Save.

Document: 3040

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