Sales Taxes: Configuration Prerequisites
Before starting the configuration of a sales tax, you must be sure that the system has been configured properly and that all required entities have been created, as described in the following sections.
Configuring the System
Before you configure a sales tax, you need to make sure that the following configuration tasks have been performed in the system:
- On the Chart of Accounts (GL202500) form, all GL accounts that
you will use for tax reporting purposes have been added. The following table lists the accounts
that should be configured in the U100 dataset.
Account Account Class Type Description Control Account Module 24100 OTHCURLIAB Liability Tax Payable TX 17000 OTHERCURAS Asset Tax Claimable TX 65100 EXTAX Expense Other Tax Expenses The liability account will be used for accumulating the tax amounts to be paid to the tax agency in a tax period. The expense account will be used to record tax adjustments and expenses for the tax agency.
- On the Vendors (AP303000) form, a vendor set up as a tax agency has been configured. For details, see Tax Agency: To Set Up a Tax Agency for Sales Taxes.
- On the Tax Categories (TX205500) form, the TAXABLE category has been created.
- On the Tax Zones (TX206000) form, the DENVER tax zone has been created.
- For a sales tax to be used in AR, a reporting group of the Output type has been configured on the Reporting Settings (TX205100) form.
- For a sales tax to be used in AP, a reporting group of the Input type has been configured on the Reporting Settings form.