Tax Product

A tax product is a line item that is added to an invoice or order (in the case of a Centralized Order Entry) when a customer buys merchandise or publications. Tax may be applied to the invoice total or per line item. Taxes are based on the ship to address of the order but only if the item's taxable checkbox has been selected upon creation. For more information on making items taxable, view the section on Important Checkboxes When Adding Merchandise.

As explained above, state taxes are based on the ship to address for your customers. As a result, you will likely want to set-up tax products for several different states if you do business across the United States. Tax is calculated based on the U.S. State and Territories tax table. However, refer to state la0ws before you assign any taxes.

The five standard Group Item Links (Add, Find, List, Run Query, Query Central), are available in the Tax Product group item.

In addition to merchandise, the following items in NetForum are taxable and have the taxable flag check box during price set up.

• Association Dues Package
• Exhibit Booth Fees
• Certification Fees
• Course Fees
• Exam Fees
• Event Registration Fees
• Event Track Fees
• Event Cancellation Fees
• Event Sponsor Fees

Adding a Tax Product

To add a tax product to NetForum so that it can be applied to the merchandise you sell, your first step is to add an individual tax product for each state to NetForum that you anticipate shipping your inventory to after you sell a product. Note that fields in bold in NetForum are required fields. You will not be able to save or apply your tax product until these fields are complete.

To add a new tax product to NetForum , follow these steps:

1. Select the Inventory tab.
2. On the Group Item Overflow menu, click Tax Product.
3. Select Add Tax from the drop-down menu. The Add Tax Product page displays.
4. Business Unit: Your business unit will already be populated in this field unless you use more than one entity for your organization. Choose the business unit you wish to use if it is different.
5. Project: For organizations that track time and projects, this drop-down can be used.
6. Product Name: The product name should be descriptive enough for you to understand what is being applied to their invoice (as well as the Accounting department).
7. Display Name: The display name should be descriptive enough for your customers to understand what is being applied to their invoice (as well as the Accounting department).
8. Description: Use the description field to add more detailed information about the tax product. This field is optional.
9. Start Date and End Date: Start and end dates are also optional. These dates relate to how long this particular tax percentage will be in effect. For example, you might specify that 5% is in effect only through calendar year 2009. More on this will be discussed below.
10. Tax Percentage: The amount of tax to be applied. You do not have to use the % symbol in the field but only the number value.
11. City: Used if you plan to restrict the tax product to a specific city.
12. State: Used to restrict the tax product to a specific state. For example, to create a Virginia state tax product as demonstrated in the example.
13. Min / Max zip code: Used to restrict the tax product to specific zip codes.
14. International Province: Used to specify international province tax rates.
15. Tax Shipping: Select this check box if the tax product should be applied to a shipping product. The tax will be based on the location of the customer ordering the product.
16. Use When Linked: Select this check box if the tax product is to be linked to another product such as an Event or Exhibit. The tax will be only be applied to the linked product and will not be applied to products with which it is not associated.
17. Tax Downloadable Products: Select this check box if the tax product should be applied to an electronic or downloadable product such as a CD or Publication. Some jurisdictions now require that these types of products be taxed while others do not. The tax will be only be applied to products with a delivery method of Web. The tax will be based on the location of the customer ordering the product.

You also need to specify account information for your taxes in the G/L Information section of the Add Tax Product page. As with all inventory products, your accounting information will need to be set-up first in the Accounting module General Ledger section before you are able to use them here. Otherwise, these drop-down fields will be blank.

15. A/R Account: Drop-down used to designate your accounts receivable account.
16. Expense Account: Drop-down used to designate your expense account.
17. Liability Account: Drop-down used to designate your liability account.
18. Return Account: Drop-down used to designate your returns account.
19. Write-Off: Drop-down used to designate your write-off account.

Once all required fields have been entered, click the Save button to enter the new tax product into NetForum .

Finding a Tax Product

Finding tax products that have been entered into the NetForum database is easily accomplished. The Find function is universal throughout NetForum and detailed on the Find topic.

Finding tax products within the Inventory module follows the same format and function. You may search by the following:

• Tax Product (A drop-down of all current tax products will appear)
• Country
• State
• County
• City
• Minimum Zip Code
• Maximum Zip Code
• International Province

The Advanced View checkbox allows you to conduct boolean searches to broaden and narrow your search as needed.

Managing Tax Product Records

Navigating to the Tax Product Profile

The Tax Product Profile is displayed once you have entered a new tax product into the NetForum application. If you want to navigate to and view a specific profile page:

• Click on the Inventory module from the Module Menu drop-down.

• On the Group Item Overflow menu, click Tax Product. You can then choose to List Tax or Find Tax products.

Depending upon which tax product you choose, its Tax Product Profile page will display.

Tax Product Profile

The Tax Product Profile displays the business unit, tax product name, and the start and end dates the tax will be in effect if you designated them. It also specifies the following (if applicable):

• City and State tax product should be applied to (if any)
• Minimum and Maximum zip codes this tax product affects
• Country this tax product falls under
• County if this is a country tax product
• International Province if this is an international tax product.

You are able to specify different rates per tax product if you desire. For example, you might create a base tax product called "Virginia Sales Tax" as in the example above and then use the Info Tab and its corresponding child form tax percentage to set start and end dates with different tax rates for each calendar year for the state of Virginia.

This is discussed in more detail below.

Info Tab

Tax Percentage Child Form

The Info tab on the Tax Product Profile contains one child form; the tax percentage child form.

This child form enables you to add additional (or varying) tax percentages to the same tax product. For example, using the screenshot above, you can see that for the Virginia state sales tax product, two tax percentages have been added, one for calendar year 2008 at 5% and one for calendar year 2009 at 4.5%. To add additional percentages, click the Add Record or button.

When you add or edit a tax product using the tax percentage child form, you are able to specify new values based on the original tax product. Using the example above, you can see that the Virginia sales tax rate for 2009 was specified at 4.5% and, more importantly, the start date and end date were set between January 1, 2009 and December 31, 2009.

This means that a sales tax rate of 4.5% will be applied to products that meet the following criteria:

• The merchandise has the taxable flag applied upon creation - see Important Checkboxes When Adding Merchandise if you are not sure how to do this
• The merchandise is sold to a ship to address in the state of Virginia
• The merchandise is sold in calendar year 2009.

This is illustrated in the screenshot below.

Linked (VAT) Tax Products

Tax products can be linked to an Event registration and to Exhibits as well. Occasionally, events may be held where taxes must be charged for that specific event (such as in the European Union where an event tax is charged).

In this example, the tax is charged to all attendees and the tax rate is based on the event location. You may create this tax product in NetForum and link the tax to that specific event only when the product is sold, or in this case only when the event is held, as seen in the screenshot below.

To set-up a linked (VAT) tax:

1. Make sure the Use When Linked check box is selected when creating the tax. View the section on Adding a Tax Product above for more information.
2. To add the linked tax to an event, click the add linked tax link on the Fees Tab on the Registration Fees child form such as seen in the image above.
3. To add the linked tax to an exhibit, click the add linked tax link on the Booth Set-up Tab for the specific booth you want to add the tax to as seen in the image below.
4. In both cases, you will be able to select the VAT tax that you created when you selected the Use When Linked checkbox when initially creating the tax product.

Tax Flags

When adding a tax product be aware of the following tax flags:

Use When Linked: To create the tax as the linkable tax product that is described above, you must make sure that the use when linked check box is selected upon creation. This means:

• Linked tax products will be available to associate with other products
• As stated, they will not be applied to orders for products with which they are not linked or associated.

Electronic Product Tax: You are now also able to apply a tax on downloaded/electronic products (some states apply a tax while others do not) by selecting the tax downloadable products check box. This means:

• Tax will be applied to products with a delivery method of Web (downloadable products)
• Tax will be based on the location of the customer ordering the product and if their jurisdiction applies tax to electronic products.

Shipping Tax: You are able to specify if taxes should be applied on shipping products by selecting the tax shipping check box. Just as with downloaded products, in some jurisdictions, shipping taxes apply while in others, it does not. This means:

• Tax will be applied to shipping products
• Tax will be based on the location of the customer ordering the product
• The tax shipping check box must be selected on the tax product for it to be applied.