Create Databases -> Customer -> Setting Up Tax Information

Setting Up Tax Information

Before you can go live, you need to set up taxing for your customers. To do this, you first set some global parameters for your company. Next you create tax districts to cover the sales tax rates you need to charge your customers. Finally, you assign the appropriate tax district to each customer. We explain how to do this, and we show you a way to assign a tax district to groups of customers, so you won't have to set each one individually.

• Setting global parameters
• Creating tax districts
• Specifying tax information for individual customers
• specifying tax information for groups of customers

New taxing features have been added to the system and are explained in detail in the Version 5 Taxing Enhancements handout.

Setting Global Parameters

A parameter is a setting you use to customize yourDDMSsystem, tailoring it to your specific needs. There are hundreds of parameters included as part of your system, but fortunately only a few must be set before you go live. We shipDDMSwith the parameters set so they work well for most dealers.

Some parameters are called global parameters; these affect the entire system, not just one particular application. To set your global parameters, follow these steps:

1. Global parameters are text-based. To access the text-based parameters inDDMS, double-click the icon.
   
   
2. The Master Menu appears. There is a letter next to each screen. To select the screen, type its letter.
   
   Press the Caps Lock key. You always use capital letters in text-based screens.
   
   
3. Select the (L) Parameters screen by typing L
   
   
4. Select the (Ø) Global Master screen by typing the numeral Ø
   
   
5. You'll see the (LØ) Global Master Parameters screen, shown below. The red square shows the fields in this screen that we'll be working with:

6. Select the [C] Change action code by typing C
   
   
7. At G/L Location, press the Tab key.
   
   
8. At Name, type over D.D.M.S., replacing it with your company's name.
   
   If you finish typing your company name before getting to the end of the field, press Tab.
   
   
9. Complete the address and phone number in the same way, typing over the information displayed, and pressing Tab to move to the next field whenever necessary.
   
   We call the company name and address you enter here your company logo. This logo will print on invoices, statements, and reports. In addition, the city, state, zip code, and area code become defaults wherever you can add customers (in the Customer Window, for example).
   
   
10. At Federal #, specify your company's federal tax number.
    
    
11. At State Tax #, specify your company's state tax number.
    
    
12. At State Tax %, press Tab. (Although you can use this field to set the state tax rate, DDMS strongly recommends that you use tax districts instead; we'll explain how to do this later.)
    
    
13. At GST, press Tab.
    
    Canadian tax setup is beyond the scope of this website. If you do business in Canada, please call the DDMS Training Department for assistance in setting up taxing.
    
    
14. At Round Tax Up to a Higher Cent, you have the option of rounding all fractions of a cent up to the next cent. A few states require this. Check with your accountant, and set this field by typing the appropriate response:
    
    

    Y	Yes, round all tax figures that include fractions of a cent to the next higher cent.
    N	No, use normal rounding. Fractions of less than 1/2 cent are rounded down; fractions of 1/2 cent or more are rounded up.

    
    
15. At Use Only State Tax for P.O.S., type N
    
    
16. At Calculate Tax by Line, you have the option of calculating tax for each line item, instead of subtotaling the order first and then calculating it. A few states require that you calculate tax by line; check with your accountant.
    
    

    Y	Yes, calculate tax for each line item.
    N	No, subtotal the order first, then calculate the tax.

    
    Setting Calculate Tax by Line to Y inflates your gross profit margins. The system calculates margins on the subtotal, and if it calculates the tax for each line, then the tax becomes part of the subtotal.
    
    
17. Press Enter. The cursor will return to the Action field at the top of the screen.
    
    Moving the cursor completely through the screen, as you just did, saves the settings you made. If you press Esc before moving through the entire screen, your settings revert to their previous state.
    
    
18. Press Esc until you return to the Keyop Menu.

Creating Tax Districts

You create tax districts to handle all of the sale tax you must collect. You also need to create tax districts for non-taxable customers.

To learn about tax districts and how you create them, please read the following topics in your online help:

• About Tax Districts
• Adding a Single Tax District
• Adding a Combined Tax District
• Setting Up Tiered Taxing

Specifying Tax Information for Individual Customers

After you create all the tax districts you need, you must do two things:

• Indicate whether each customer is taxable
• Assign the appropriate tax district to each customer.

If you have a number of existing customers to which you need to assign tax districts, save time by assigning tax districts to groups of customers, instead of selecting each customer individually. To learn how to assign tax districts to groups, click here.

To specify tax information for an individual customer, follow these steps:

You can specify tax information when you first create a customer, or add this information to an existing customer; the steps are the same. (To learn how to add a customer, click here.)

1. If you're changing an existing customer, select the appropriate customer account. (For instructions, click here.)
   
   
2. Click the Order Entry tab. The two boxes you use for tax information are Taxable and District, as shown here.

3. In Taxable, type the appropriate code:
   

   Y	Yes, this customer's purchases are taxable.
   N	No, this customer's purchases are not taxable.

   
   
4. In District, specify the tax district for this customer. You can do this in two ways:
   

• Type the district number.

• Click the button to display the Tax District dialog box, containing a list of the districts you created.
  
  Scroll through the list of tax districts and highlight the correct district by clicking it.
  
  Click OK.

5. Save your changes by clicking the button.

Specifying Tax Information for Groups of Customers

To learn how to set tax information for a number of customers at once, watch this interactive online tutorial.