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BT Tax Type Maintenance

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Summary

The Tax Type Maintenance window is used to create and maintain tax types. Tax Types are used to group taxes together into logical associations such as Payroll or Gross Receipts. Tax types are attached to businesses and used to calculate the tax amounts when returns are received in the Cash Receipts module (CR> Cash Receipts> Return Entry).

Tax types are attached to businesses using the Business Maintenance window (BT> Maintenance> Business> Open a business> Tax Types tab).

Step by Step

 

1     View the existing tax types.

  • Open the Tax Type Selection window (BT> Maintenance> Tax Type).
  • The Tax Type Selection window displays all of the tax types that have been created in the application.
  • Highlight a tax type and press DELETE or click the Delete icon   to delete the selected tax type.
    • You cannot delete a tax type that is attached to a business (BT> Maintenance> Business> Open a business> Tax Types tab). If you try to delete a tax type that is attached to another record, an information window will open displaying the record it is attached to.
  • Highlight a tax type and press ENTER or click the Modify icon   to view the information attached to a tax type.
  • Press INSERT or click the Create icon to create a new tax type. This will open the Tax Type Maintenance window.

 

2     Create or modify a tax type.

  • The Code field is used to identify a unique tax type. The code field can be up to 20 characters long.
    • This is a required field.
    • The code cannot be changed once the tax type has been saved.
  • The Description field is used to enter a description for the tax type. The description can be up to 60 characters long.
  • The Credit Fee drop-down menu is used to select a credit fee type. This is a required, user-defined fee that is that is used to direct overpayments associated with the tax type to the appropriate account. Enter a fee type or click the Credit Fee field label to select a fee type from the list.
    • Fee types are created and maintained using the Fee Maintenance window (BT> Maintenance> Fee).
  • The Penalty Fee drop-down menu is used to select the fee code that should be used to assess penalties on this tax type.
    • Only fee codes set up as penalty types will display in the drop-down menu. Fee codes are set up as penalty fees using the Fee Type drop-down menu on the Fee Maintenance window (BT> Maintenance> Fee> Open a fee> Fee Type drop-down menu> Select Penalty). The selection in the Fee Type drop-down menu cannot be changed once a fee code has been saved, so if the fee code you would like to select does not display in the drop-down menu, you will have to create a new fee code and set it up as a penalty type fee code.
  • The Interest Fee drop-down menu is used to select the interest code that should be used to charge interest on the tax type.
    • Only fee codes set up as interest types will display in the drop-down menu. Fee codes are set up as penalty fees using the Fee Type drop-down menu on the Fee Maintenance window (BT> Maintenance> Fee> Open a fee> Fee Type drop-down menu> Select Interest). The selection in the Fee Type drop-down menu cannot be changed once a fee code has been saved, so if the fee code you would like to select does not display in the drop-down menu, you will have to create a new fee code and set it up as a penalty type fee code.
  • The Omit Units drop-down menu is used to override the units requirement for the tax type. This allows you to enter a Line Pay Amount in the Cash Receipts Return Maintenance window (CR> Cash Receipts> Return Entry> Select an Invoice> Line Items section) without entering any unit information.
  • The Deposit Years Ahead and Deposit Periods Ahead fields are used to apply returns to future years or periods.
    • These fields can be used independently or in conjunction with one another. For example, if a return is meant to be applied in 18 months, 1 could be entered in the Years field and 6 entered in the Periods field. Alternatively, the Years field could be left blank and 18 could be entered in the Periods field.
  • The Discount Percent field is used to specify a discount that can be applied to the fees attached to the tax type. This is usually used to encourage early return filing.
    • When the tax type is selected during the CR> Cash Receipts> Enter Returns process, the discount will be automatically applied to any fees that are discountable. Fees are specified as discountable by checking the Discountable toggle when the fee is attached to the tax type.
    • The percentage is entered as a whole number. For example, 10.25% should be entered as 10.2500. This field has a 100% limit.
  • The Use Reconciliation Period field is used to set up the tax type as a reconciliation tax type.
    • In order to set up a reconciliation period, you must first add an additional period to the tax type schedule. For example, when setting up a tax type that will be collected quarterly, you would add four periods to the tax type schedule. If that tax type will be used as a reconciliation tax type, you would then add a fifth period to the schedule.
    • When True is selected from this drop-down menu, the last period in the schedule field below will be designated as the reconciliation period.
    • Reconciliation tax types are used in the Reconciliation process (BT> Reconciliation).
  • The Allow Extension toggle is used to allow an extension period for a return line item created with the selected tax type.
    • Checking this toggle will activate the Extension Days column in the Schedule section below.
    • Checking this toggle will also activate the extension fields on the Return Maintenance window (CR> Cash Receipts> Return Entry> Select a return> Extension Filed and Extension Date fields).
  • The Avoid Holiday Due Dates and Avoid Weekend Due Dates toggles are used to prevent the system from setting due dates that fall on holidays and weekends. If these toggles are checked, the system will automatically adjust due dates that are scheduled for holidays or weekends. Those due dates will be moved to the next available weekday.
    • Holidays are created and maintained on the Holiday Maintenance window (BT> Maintenance> Holiday).
  • Press ENTER or click the Save icon to save the tax type.

 

3     Add fees to the tax type.   

 

  • The Fees section of the Tax Type Maintenance window is used to add fees to the tax type. You can add as many fee codes to the tax type as is necessary.
  • Click the Create icon   drop-down menu and select New Fee. This will open the Fee Selection window to select a fee code.
  • Highlight a fee code in the Fee Selection window and press ENTER or click the Confirm icon   to add the fee to the tax type. The selected fee code will populate in the Fees section.
  • Check the Discountable toggle if the fee should be eligible for the discount specified in the Discount Percent field above. When the tax type is selected during the CR> Cash Receipts> Enter Returns process, the discount will be automatically applied to any fees that are discountable.
  • Highlight a fee code in the Fee Selection window and press DELETE or click the Delete icon   to remove the fee from the tax type. This will disassociate the fee from the selected tax type and will not permanently delete the fee from the database.
  • Press ENTER or click the Save icon   to save the tax type.

 

4     Add a schedule to the tax type.   

 

  • The Schedules section is used to add a schedule to the tax type.
  • Click the Create icon   drop-down menu and select New Schedule. This will create a new schedule line item.
  • Each schedule line item represents a filing of the tax type. For example, if this tax type is filed twice a year, there should be two line items in the Schedule section, one for each time the tax must be filed. Specify an End Month and Day and a Due Month and Day for each schedule line item.
    • The months on the schedule are calendar months not fiscal periods. For example, if a tax should be received on March 1 and September 1, create two line items in the Schedule section, one with a month and day of 3 and 1 (March = 3), and one with a month and day of 9 and 1 (September = 9).
    • Check the Next Year toggle if the Due Month and Due Day fall in the year following the billing period.
  • An individual tax type schedule can be adjusted from business to business. This allows you to associate one tax type with multiple businesses but adjust the due dates to meet the needs of each business.
    • These adjustments are made on the Business Maintenance window (BT> Maintenance> Business> Open a business> Tax Type tab> Override Schedule icon  ). Click here for information on Business Maintenance.
    • The number of periods in the tax type schedule cannot be edited. You will need to create a new tax type if you need to add or remove periods to the schedule.
  • Press ENTER or click the Save icon   to save the tax type.
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