This article describes how to handle changes to the sales tax rate. for example, on January 1, 2018 the New Jersey state sales tax rate decreased from 6.875% to 6.625%. The remainder of this article will use that particular change as an example. .
Sales tax changes are not retroactive and must be done in conjunction with EOM close.
- Verify that any sales tax credits have been processed for the current year. This applies to active accounts as well as uncollectable debt for which tax was billed.
- Ensure that all customer sales that shipped in the prior have been processed and posted.
- Calculate finance charges and produce customer statements, if applicable.
- Close A/R and A/P and wait for each module to fully complete before proceeding.
- Edit the applicable tax codes immediately after the EOM close is complete.
- Do not create any sales invoices for materials selling or shipping in January until after the end of month close for December is complete and tax percentages successfully changed.
- Go to File > Customer > Tax.
- Choose the applicable code using the search icon and click Edit.
- Revise the Column 1 amount to 6.625%. New Jersey has a single state-wide rate and requires a single column to capture the tax on the Sales Tax Journal. Click Save before exiting.
- To review all changes made click the Report button to create a custom listing of tax codes, rates and other relevant
Please note that your state may require “multi-column” filing in which tax is allocated to the state, county, city or other agencies. Check with your CPA and appropriate filing agencies for the correct rates and effective dates. DDI is not responsible for providing legal, accounting or tax guidance.