Sales Tax Sort Codes are used to establish groups of sales tax codes, characterized by some commonality, for subtotaling on the Sales Tax Journal.
Some states have a tax structure where the state receives a portion of the tax, and the county, city, or other qualifying jurisdictions receive varying percentages.
When multiple tax codes are involved, it can be cumbersome to determine each agency’s allocation. Grouping tax codes by assigning a sort code will make this task easier.
See also: Create tax codes
- Go to File > Customer > Tax.
- On the Customer Tax window, choose a Sales Tax Code from the list.
- Assign a Sort Code of 30 characters or less. This code should be used consistently for all applicable sales tax codes and will create subtotals on the Sales Tax Journal.
- Go to Accounting > End of Month Closing and Journals.
- On the End of Month Closing and Journals window, choose the Sales Tax Journal.
- Enter an Accounting Period or Date range. Note that using a date range will not tie to the period General Ledger Sales Tax Payable Sales Journal values unless period closes are completed on time.
- There are 4 options for this report:
- Summary: for accrual base filers. Most Inform system users remit sales tax on an accrual base, which refers to tax BILLED during a period is payable the following month to the tax authority.
- Detail: above with transaction level detail.
- Cash Summary: for cash base filers. This is not common among DDI’s user base, in which tax COLLECTED during a period is due the next month.
- Cash Detail: above with transaction level detail.
Sort Codes work best in Summary mode. This example shows all “New Jersey” classified sales tax codes are subtotaled.
For more information about sales tax, please refer to Understanding the Sales Tax Journal.