Overview

This feature has been added to allow businesses to report non-taxable material sales to multiple QuickBooks Tax Codes.

When entering line items on a QuickBooks invoice each line item can be listed as Taxable (Tax) and Non-Taxable (Non). These two tax codes are created automatically by QuickBooks during the installation or creation of a company. These tax codes are used for reporting purposes to identify goods and services that are taxable or are not taxable. Previous version of QuickBooks Synchronization only used the two available default tax codes when transferring transactions to QuickBooks.

When these changes are not implemented a transaction processed with a tax code other than Exempt where any part of the transaction or the material was considered exempt, QuickBooks will select the QuickBooks Non-Tax (Non) Sale Tax Code

Customers are able to create a custom Sales Tax Code List in QuickBooks and associate the QuickBooks tax codes with Interact tax codes. This will enhance the QuickBooks tax reporting capabilities. Tax Codes in QuickBooks are different than how we use Tax Codes in Interact. In Interact a Tax Code is a group of taxing authorities to create a total tax percentage. QuickBooks uses Tax Groups to do the same thing, however QuickBooks Tax Groups are not used with the QuickBooks Synchronization. A customer may use them in QuickBooks for other purposes outside of Interact. Do not get confused if you see Tax Groups used in QuickBooks. Interact does not use them.

Example

Setup

For every QuickBooks Sales Tax Code a corresponding non-tax code must exist. In the following example QuickBooks has been configured with five (5) Tax Codes each with a corresponding Non-Tax (Non) code . The Sales Tax Code list in QuickBooks will look similar to the following.

Interact must be configured in the same way. When completed the Interact Sales Tax Code list will look similar to the following.

The codes used in QuickBooks must match the codes in Interact. The non-tax codes will not have any tax authorities listed.

Adding Sales Tax Codes in QuickBooks. (make separate page)

Start QuickBooks. Select Lists | Sales Tax Code List. Select New from the Sales Tax Code drop-down list in the lower left corner.

Enter a Sales Tax Code and Description. Select the Taxable or Non-Taxable radio button and click OK to save. The QBIM will match the QuickBooks Sales Tax Code with the Interact Sales Tax Code.

If the default Tax and Non codes will not be used, they can be set inactive after the Sales Tax Preferences have been changed for the Taxable and Non-Taxable items. To set new default codes select Edit | Preferences. Select Sales Tax from the menu on the left. Click the Company Preference tab.

Set a new default for Taxable Item Code and Non-Taxable Item Code in the Assign Sales Tax Codes section. Click the OK button to save changes and continue.

Adding Sales Tax Codes in Interact

Start Interact. Select Accounting | Taxes | Tax Codes. Click the New button. Enter a Code and Description. The Code must match the Code in QuickBooks.

Click the Save button to save changes.

Turn the Feature On

Open the Interact QuckBooks Initialization file; qb.ini and add the following line to the [QBooks] section

• TaxCodes=True

A new section, [TaxCode], will need to be added if any Interact Tax Authorities are not applied to all Interact pricing items (Added Charge, Freight Charge, or Price Component 1 - 3. To review Tax Authorities and the components the tax is applied to, select Accounting | Taxes | Tax Authorities. In the following example, the EC - City of Eau Claire tax authority is only applied to the 3 Interact price components. Tax is not applied to an y Added Charges or Freight Charges. Any Tax Code using this authority will need to be added to the [TaxCode] Section.

Add the taxable and non-taxable pair on separate lines. For this example, we would add the following lines

• [TaxCode]
  CF=CFE                    Material taxable with QB code "CF", freight or added charges not taxable will allocate to "CFE".
  EC=ECE
  WI=WIE

QBIM was designed to list Material, Freight, and Added Charge as separate line items to correctly assign the charges to the correct QuickBooks General Ledger accounts. Through the synchronization process QBIM will identify taxable and non-taxable portions of the transaction and set the Tax Code accordingly.  If the Exempt sales do not need to be tracked by jurisdiction for tax reporting purposes, a single Exempt Tax Code could be created called NON and use that for all non-taxable portions of any transaction.This is the one example where the NON Tax Code in QB may be used.

For example, the Tax Code section in the ini file could look like this:

• [TaxCode]
  CF=NON              Material taxable with QB code "CF", freight or added charges not taxable will allocate to "NON"
  EC=NON
  WI=NON

Zero Item or Subtotal Line Item

Set the Insert Zero $ Item Before Tax option in the Misc. Setup section of QBIM to ensure the QuickBooks Vendors | Sales Tax | Sales Tax Revenue Summary report is correct.