USA Sales Tax Setup Issues

It seems you want Manager to be equal to what you are used to in Quickbooks. It seems that you prefer Quickbooks so why not stick with it if it suits your needs better?

QuickBooks has gotten far too extortionate for my liking. I’m willing to pay for Manager, I’d rather pay literally anyone other than Intuit for products. I like what I’m seeing so far, but there are a few key things that are needed to function. This isn’t just a matter of learning a new system, it literally cannot do what is needed, and it is unfortunate. It is also a standard way of doing things in the USA that many other software packages offer. I’m also obviously not the only person that needs it, as referenced in the linked post in my thread starter. Could I manually do taxes per item on every invoice? Sure, I suppose, but that is very tedious. Even if it cannot be applied to customers, making it apply per invoice would be fine. It could flow like

IF item TAXABLE = yes THEN rate=INVOICETAXRATE.

Or, perhaps there could be a setting in the item for tax rate, =INVOICERATE. Or something.
Then items that do get taxed, can look for the rate in the invoice. Items that don’t, will still have zero. Obviously it would be more complicated than that, but I have to imagine it’s possible when others are doing it.

Imo Managers multipart tax code could be improved by making it a collection of previously defined single tax codes. Doing so would enable creations of standard reports and electronic reporting to major tax authorities.

However due to the very fragmented nature of the USA tax system, I do not believe it is likely Manager would directly support and automated location based look up. I also suspect other USA specific requirements, such as change of delivery address changing the tax codes, has a general enough utility to justify incorporation in Manager. Such changes would need to have value across a significant number of the jurisdictions Manager sell to.

Again, I have no problems setting up the rates on my own and I’m really not expecting Manager to automate location-based lookup. Very few of the other big players do. They could definitely partner with a tax agency and get a huge boost of customers if they did, though.

And many taxes even in the USA are multi-part. Here, I have city, state, and county. I immediately saw how to combine those into one rate to bill out and have it separated on the back end, which is nice. Setting up the rates seems easy. It’s just getting them to apply to an entire invoice or receipt that is more time consuming.

Back to my suggestion, I think the easiest way would be to create an invoice or receipt master override, and then be able to set the item tax code to =invoicerate. Possibly doing so with customers, and have the item tax code set to =customerrate. These could be options in the item tax code drop down, or you could use actual rates like they are done now.

how is that helpful for any other group than the small percentage of USA users?

I wonder what the demographic breakdown is. Hopefully manager will be seeing an influx of US users soon, given how bad the other options are getting here.

Though there is nowhere to enter a tax rate per invoice, Manager does have a feature that helps. I use it to cut down on the amount of clicking and changing:

For the first line-item on the invoice enter the tax code that will apply to all items on the invoice. Don’t enter any other info. Copy the line for as many items as will be on the invoice. Each copied line will have the tax code filled and is ready for an item to be selected.

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The point @Patch was making that one can not expect Manager to be bespoke to specific wants that are not essential but more a convenience to be adopted for any geography. What may be a good to have for one will be a nuisance to another. If anything I am concerned that Manager tries to do too much that is not essential for accounting purposes and bloats the application, making it prone to more questions and possible bugs. To illustrate this, just count the number of possible customizations, settings and form fields (without custom fields). Despite the initial simplicity, this forum shows that Manager quickly can become complicated.

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Actually this could be achieved within a more general solution. Invoice level tax codes have a more general applicability, typically for withholding tax but in the general structure described in this post other tax codes could also be used

Most of the world has now moved to VAT tax schemes where the tax is determined by product level

The complicated tax schemes used in the USA are so labyrinthine that it would make the tax codes in Manager unfathomable for the average user outside of the USA

Ah, great tip, thank you! This is at least a little bit easier than verifying every single item. I will say that if you do assign a tax code to an item, it will override what is pre-existing in the copied line (I tested it by putting a tax rate in an item). In a sense, this is good - labor has 0 tax here, so it will take the rate out of the line for labor when I pre-fill that rate to be no-tax. And I wouldn’t want to pre-fill other sales tax on items anyway, that’s part of my complaint lol.

Some of our US states are bigger than entire European countries. Aren’t there tax change complication issues in Europe going between countries? Anyways, that said: Sales taxes are actually generally pretty easy.

The RATES may be different per location, but HOW the taxes are processed is the same in the entire country. The merchant finds the rate (this is the only an issue if you’re doing multi-location - but again, don’t rates change in different countries?), applies it on top of the purchase price, the customer pays it, and then the merchant remits 100% of the tax to the governing agency.

Most European and other countries do not have multiple layers of tax like the USA

Most economists will agree that VAT is a much better way to tax goods and services than the various layers of Sales taxes used in the USA

Where are you located? I’ll be honest, I don’t think I understand your tax rules enough to understand if that would help in the USA. Neither of those posts make much sense to me. And I’m guessing what I’m asking for here, doesn’t make sense to people outside of the USA, which is logical.

The only things we have withholding taxes for is payroll/income. Our income tax in the USA is definitely complicated, or more accurately, the ways we can write things off against income to lower our tax burden is what’s complicated.

They may not be multiple layers - but are they different rates in different countries? 5% in one, 4% in another? Or is it the same rate across all of the EU? But then if it is, what happens when you go to UK? Is that a different rate?

It isn’t. Each European country is an independent Nation and thus not a State as in USA. Not all European countries have the EURO as their base currency nor do they have same tax systems or for that matter languages. There are many EU agreements related to import and export taxes but not to VAT and Corporate tax.

No, because countries charge the taxes due to them as they are supposed to.

I wonder why you mention only USA and Europe. Many Manager users are from much farther afield and probably in larger numbers. The application is developed and maintained by an Australian company with a strong user base there, but similarly popular in Middle-east, India and Africa.

Yes, everything you’re saying proves my point. Each country (or state) has different tax systems, and this would be needed outside the USA if a business served multiple countries.

Your tax system requires collection of tax for multiple tax authorities for each item you sell (state, county, city etc). As a result you have to use multipart tax codes. In Manager that currently requires independent tax code for each combination of tax codes. The first point above suggest have one tax code for each tax authorities tax, then combine that single tax code in as many combinations as required. Doing so enables report transformations to readily support each individual tax authorities reporting requirements.

The second point is to generalise the structure of invoice level tax codes to use the above structure but presented to the user as applying to all invoice items. That enables support of multiple withholding taxes but could also be used to apply any tax code all invoice line items (the feature you wanted).

OH yes, I understand now. Thank you for explaining it better. And with how you are explaining it, I see that (at least part of this) is actually how QuickBooks does it. Many independent codes for reporting that can then be setup as one code combination (they call it a group). You choose the group on invoices or receipts so it shows the total tax, but in back-end reports it divides it out and shows all of the individual ones you owe money to.

In my Manager test file, I setup taxes with multiple rates in them, which was very easy. The thing is, I hadn’t tried running a report yet. I just did, and it only shows the tax code group name, but not the individual rates inside of it. That would make things very difficult for us in the USA as well. The mechanism is already there to have multiple rates in one code, and the invoices and receipts can show it, so why doesn’t the Tax Summary Report show it?

Edit - I just created sub-accounts for each tax rate and assigned them properly. Now, the Balance Sheet report does show the correct amount broken out, but the Tax Summary report still doesn’t. This really is problematic. If there is a better way to get a report on these sub-accounts, I haven’t found it yet - maybe it’s in the guides or someone can tell me. If there isn’t a better way, there needs to be.

The proper setup of a multi-component tax code is specifically illustrated in the Guide, complete with separate tax liability accounts.

Separation of component tax rates for reporting remains a shortcoming.