Sales Tax Code Set Up
This FAQ will go over how to set up tax codes in Paradigm. Another way tax codes can be set up is by using Avalara’s AvaTax. More information on that can be found here: AvaTax
Sales Tax Collected
Sales tax codes for collected sales tax can be created and edited by going to System > Company Preferences dropdown > Sales Tax Collected. The tax codes set here, will be used on AR transactions. (Orders, Invoices, etc.)
From here, sales tax codes can be created by entering the sales tax code at the top, and applying a tax ID in the bottom section. To create a new tax ID, click on the “Tax IDs” button at the top, or click on the folder icon in the bottom section.
Tax Code Checkbox Options
- Use Tax – Select whether or not it is a use tax.
- Tax Freight – Applies the tax code to the freight charge.
- Tax Other – Applies the tax code to the other charges.
- Auto-Replace – This is only used on 0% tax rates, and allows for the tax rate to be replaced by another State’s tax rate. This is used when the state that the company is based in has a 0% tax rate, but is shipping orders to states that do collect tax.
- Discontinued – Marks the tax code as discontinued.
Template Tax ID
When creating new tax IDs, a template tax ID can be chosen from the drop down. Any new tax IDs will get default values from this template tax ID for class tax code settings. These are settings determining which classes of items will be taxable under this tax.
Sales Tax Paid
Sales tax paid are almost always use taxes, but are rarely needed. The tax codes for sales tax being paid can be created and edited by going to System > Company Preferences dropdown > Sales Tax Paid. The tax codes set here, will be used on AP transactions. (POs, Purchase Invoices, etc.)
From here, sales tax codes can be created by entering the sales tax code at the top, and applying a tax ID in the bottom section. To create a new tax ID, click on the “Tax IDs” button at the top, or click on the folder icon in the bottom section.
