Re: Taxes...again

["Chris Travers" <..hidden..>]

Hi Charley;

I hope others have ideas to add here.  Seneca?

> I'm stuck on taxes again.  I've been trying to find every which way
> possible to use the default simple taxes within LSMB 1.2 to accomplish
> my tax needs to avoid making things complicated but it's not working.
> Taxes are only applicable if the shipping address is in New York state.
>   Here's the scenario, however:
>
> 1) There are two types of taxes: exempt and non_exempt.  Exempt taxes
> apply to apparel over $110.  Non_exempt taxes apply to all apparel below
> $110 as well as all other product except food.
>
> 2) non-exempt taxes are state tax (4%) plus county tax (variable
> percentage between 3% and 5%).
>
> 3) exempt taxes are a variable percentage determined by the county and
> ranges from 0% to 5% but are exempt from the state tax rate.
>
> 4) tax rates can change roughly every 3 months.
>
> 5) shipping is taxed at the non-exempt tax rate (state tax rate + county
> rate).
>
> 6) county tax rate for exempt and non-exempt taxes can differ.

Ok.  Here is my suggestion:

1)  Get a map of zip codes for each county.  I wonder if the State or
the USPS povides such a list?

2)  Create a tax module which looks up shipto based on zip code.  I
suppose you might have issues if you ship to a country like Indonesia
that has a similar postal-code system to the US.   But hopefully by
the time you face that issue we can have 1.3 out :-)  The tax module
can have arbitrary rules, such as whether the product is subject to
which type of tax and under what circumstances (it was designed with
the idea that it might be needed for circumstances where tax depends
on what *else* is purchased).

> On the e-commerce side of the application, I have the tax calculating
> correctly and there's no need to adjust taxes so long as the table
> specifying the correct percentages is kept up to date.

Ok.  THat can make things easier.
> My questions:
>
> 1) Do I need to create a separate tax module?  If I do need to create a
> separate tax module to handle this, can someone give me some general
> guidelines on how to go about creating the module?  I couldn't find
> anything in the documentation that would set me on the right path.

If it were me, I would go this route.  It means that if I get a phone
order, I can apply taxes the correct way.  But it may not be an
absolute requirement depending on where your invoices are printed
from.

Another option is to have your ecommerce application add a separate AR
transaction for the tax due with the invoice number the same as your
other invoice number.  THis way you can track it in the system
properly.  Or you could use a GL transaction with the same reference
number though this may mess up the AR/AP calculations (though I assume
ecommerce handles billing).
> 2) I'm think that I'd be better served by setting this up a service and
> approaching it from that manner, especially since the e-commerce side of
> the application already handles the tax issues easily and correctly.  It
> would be a simple matter to pass in the total.  But when setting up a
> service, you need both an income and an expense account.  I'm assuming
> the income account would be the tax account.  Do I need to create a new
> expense account?  If so, how should I set it up?  If not, what expense
> account should I attach it to?

I will have to work this out on paper.  One option might be to have
the income and expense accounts both link against a liability tax
account.  However, I am not 100% sure about that, and IANACPA.

Best Wishes,
Chris Travers