Tax Agency: To Set Up a Tax Agency for Sales Taxes

By performing this implementation activity, you will learn how to create a vendor and define it as a tax agency to which you will report taxes.

Story

Suppose that you, as an implementation manager, are configuring the tax management functionality for the Muffins & Cakes company. The company's managers have decided that they want to automatically generate tax bills to report taxes to the Colorado State Department of Revenue.

You need to create a new vendor and define it as a tax agency in the system.

Configuration Overview

In the U100 dataset, for the purposes of this activity, on the Vendor Classes (AP201000) form, the TAXAGENCY vendor class has been configured.

Process Overview

In this activity, to create a tax agency, you will create a new vendor on the Vendors (AP303000) form. On the tabs of this form, you will specify the vendor's details, select the Vendor is Tax Agency check box, and specify the needed settings on the Tax Agency tab.

System Preparation

Before you begin to work with a tax agency, launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as a system administrator Kimberly Gibbs by using the gibbs username and the 123 password.

Step 1: Creating a Vendor Account

To create a vendor account to be used as a tax agency, proceed as follows:

  1. Open the Vendors (AP303000) form.
    Tip:
    To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
  2. On the form toolbar, click Add New Record.
  3. In the Summary area, specify the following settings:
    • Vendor ID: COTAXDEP
    • Status: Active
    • Vendor Class: TAXAGENCY
  4. On the General tab, in the Account Name box, specify CO State Department of Revenue.
  5. In the Vendor Properties section, select the Vendor Is Tax Agency check box.
  6. On the form toolbar, click Save to save your changes.

Step 2: Configuring the Vendor as a Tax Agency

To configure the newly created vendor account to act as a tax agency, proceed as follows:

  1. While you are still on the Vendors (AP303000) form, open the Tax Agency tab.
  2. In the Default Tax Accounts section, specify the following settings:
    • Tax Payable Account: 24100 - Tax Payable
    • Tax Expense Account: 65100 - Other Tax Expenses
  3. In the Tax Report Settings section, ensure the following settings are specified:
    • Default Tax Period Type: Month
    • Automatically Generate Tax Bill: Selected
    • Use Currency Precision: Selected
  4. On the form toolbar, click Save to save your changes.