Specifying Tax Information for Projects and Categories
When you process cost and charge transactions for cost plus and fixed price projects, the program calculates the applicable taxes using tax information specified on the Project Maintenance form for the contract project. The program credits the tax authorities associated with the tax group specified for the project.
If you need to use a different tax group than the one normally used
for the customer in Accounts Receivable, Project and Job Costing lets
you specify
a different tax group for a contract
.
The tax group you assign to the contract is used as the default for new
projects you add to the contract, but you can change
the tax group for individual projects.
You can also specify default tax classes for a contract. To change the customer tax classes for any of the tax authorities used by the tax group, click the Zoom button beside the Tax Group field to open the Customer Taxes form, where you change the tax classes.
The default tax group and tax classes are used for new projects that you assign to the contract, but you can change the tax group and tax classes for individual projects. Whether you specify tax classes and the tax included status at the project level or at the category level depends on the project type and the accounting method.
Specifying tax information for fixed price and cost plus projects
For fixed price projects that use a project percentage complete or a completed project accounting method and for cost plus projects that have a completed project, total cost percentage complete, or labor hours percentage complete accounting method, you specify the tax class and tax included status for each tax authority on the Taxes tab of the Project Maintenance form.
For cost plus projects that use the billings and costs, category percentage complete method, or accrual-basis accounting methods, and for fixed price projects that use these accounting methods and a Summary invoice type, you specify tax information for each category on the Accounts tab of the Category Maintenance form. The program displays default tax classes and tax included statuses, as follows:
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If a customer tax class has a corresponding item tax class for the tax authority in Tax Services, the program uses the tax class from the customer record as the default, but you can change it.
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If a customer tax class does not have a matching item tax class for the authority in Tax Services, the program uses "1" as the default tax class, but you can change it (if the tax authority permits).
Specifying tax information for time and materials projects
For time and materials projects, and for fixed price projects that use an Item invoice type, you do not specify tax information at the project or the category levels. Rather, you specify the tax class and the tax included status when you enter a transaction.
In the transaction entry forms, Project and Job Costing displays the tax authorities used in the customer record. It displays a default tax class, as follows:
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If a tax authority is assigned to A/R item, the A/R item tax class for that authority is displayed.
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If the tax authorities are not assigned to the A/R item:
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If a customer tax class is used for the item tax class, it is used as the default for the transaction.
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If a customer tax class dos not exist for the item tax class, the tax class "1" is used as the default.
The program displays the default tax included status, as follows:
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If the tax authorities are assigned to A/R item, the tax included status for the A/R item is used.
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If the tax authorities arenot assigned to the A/R item, "No" is used as the default.
You can change the tax included status for a transaction only if the tax authority permits it.
Tax Estimates
Note that taxes are not automatically calculated for estimates. You must include tax in the estimated cost amounts.
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