Sales Tax with GnuCash
Derek Atkins
warlord at MIT.EDU
Wed Dec 16 11:13:14 EST 2009
Hi,
Just a note: A Tax Table can have multiple entries, and each entry can
have its own account. So for example you can have a Tax Table named
State-County-Town and have three taxes in it that each go to their own
account. So for example your tax table could look like:
Sales Tax State-County-Town
5% Liabilities:Taxes:Sales:State
2% Liabilities:Taxes:sales:County
1% Liabilities:Taxes:sales:Town
Then on the invoice you just use the "Sales Tax State-County-Town" Tax
Table and the appropriate taxes will be filed into the appropriate
accounts.
Admittedly this gets to be problematic if you have lots of combinations
that you need to enumerate.
-derek
Pablo Francesca <rshgeneral at yahoo.com> writes:
> I figured you would want to know how to do that after I thought about your question some more. Again, I'm not a gnucash pro, and the my quick answer is that what you want to do cannot be done without programming.
> You can have many different tax tables, but I don't believe that you can have multiple tax tables per line item on your invoice, which it what it seems you want. So I can say confidently that you could have many different sub accounts under Sales Tax to distinguish how much each municipality is taxing in total, but this is not what you want. You want one account for state sales tax, and one account each county tax,and one account for each city tax.
> There is an awfully nasty solution, that I thought about telling you about, but I didn't like it, I was hoping someone with more experience would be able to help.
>
> The solution would involve lots of simple transactions at the end of the month, (which is why it would be perfect for a programming solution). Since you know the total tax rate for each tax table (i.e. municipality), you can derive the state and county portions and then move those sums into other Sales Tax accounts. For example, suppose you find you have a total of 200 dollars in State1-County2-City3, and you know the total tax rate for this account is 4 (state), 1 (county), 0.5 (city) for a total of 5.5 percent. Well 200/.055 would give you a total sales volume of 3636.36. So then you would know that the state portion is 3636.36 * .04 = 145.45 and that the county portion is 3636.36 * .01 = 36.36. Since you would have your totals you could then just move the relevant amounts into their own accounts. Its solutions like this that would kinda make you long for Quickbooks.
>
> --- On Tue, 12/15/09, J. Anthony Hertzler <plant.sequoias at gmail.com> wrote:
>
> From: J. Anthony Hertzler <plant.sequoias at gmail.com>
> Subject: Re: Sales Tax with GnuCash
> To: "Pablo Francesca" <rshgeneral at yahoo.com>
> Date: Tuesday, December 15, 2009, 10:18 AM
>
> Thank you for your clear and understandable explanation. The setup you describe will probably work for me at this point, but I'd like to know how to fine-tune it a little more. At the end of the month when I pay sales tax, I need to have records not only for the total tax owed, but also separate totals for the state, each county in which sales were made, and each town in which sales were made. Is there a procedure that would allow me to subdivide the Sales Tax account into state, county, and city accounts and divide the tax liablity correctly among them based on which State-County-City tax table I applied. For example, say State tax is 4.5% and I make a sale in a county where tax is 0.9%. Rather than just having 5.4% credited to the Sales Tax account, I want to be able to choose the appropriate tax table and credit individual sub-accounts for the state and county within the Sales Tax account. What's your best suggestion on how to accomplish this in
> Gnucash?
>
>
> Thanks again for your time and assistance.
>
>
> On Sat, Dec 12, 2009 at 9:14 PM, Pablo Francesca <rshgeneral at yahoo.com> wrote:
>
>
> I'm no expert, but this worked for me.(windows, version 2.2.9)
>
> Assuming a US based business, try this:
>
> First set up a tax table: Business->Tax Table Editor.
> Click the New button underneath Tax Tables.
>
> Name your Tax Table (Ex: Anystate-AnyCounty-AnyCity)
> Make sure Percent is select and input your relevant percentage in the value box
>
> This next step is crucial. Select an account from the Account list box. This is the account where the sales taxes will be posted. This is usually Liabilities: Sales Tax. After you click OK, it will show up in the Tax Table Entries side of the window for editing later if you need to do this.
>
>
> Now, you can use your tax tables. When creating an invoice, ensure that the Taxable column is checked. In the Tax Table column, select the appropriate tax table. The tax will
> automatically be calculated and you can see the total in the far bottom left of the screen and the taxed amount in the tax column.
>
> Go ahead and save and post your invoice. Now, what just happened?
> The invoice was posted to accounts receivable for the full amount and this will be reflected in your customer reports. The sale will be credited but without the sales tax. There will also be an entry in a the account associated in the tax table to reflect the tax. In our example, this was Liabilities: Sales Tax. In accounting terms, we debited A/R and created a split credit in an income account and a liability account. For example, if your invoice total was 100, and your sales tax was 5 percent, A/R would be debited 105, Income: Sales might be credited 100 and Liabilities: Sales tax would be credited 5.
>
>
> So now you have a tax liability automatically created in which you can pay whenever you need. Just move
> your funds from the relevant asset account to extinguish the liability.
>
> I hope this helps. Once it is set up right, it works nicely, kinda like Quickbooks. I hope my attempt to be thorough was helpful, I struggled finding relevant documentation, but after playing around with it, figured out how it worked.
>
>
> --- On Fri, 12/11/09, J. Anthony Hertzler <plant.sequoias at gmail.com> wrote:
>
>
> From: J. Anthony Hertzler <plant.sequoias at gmail.com>
> Subject: Sales Tax with GnuCash
> To: gnucash-user at lists.gnucash.org
>
> Date: Friday, December 11, 2009, 4:36 PM
>
> Hi, I'm unable to find anything in the gnucash documentation about
> setting up sales tax tables for a business. I run a small portable
>
> building business, so we're both manufacturers and retailers. We charge
> the customer
> sales tax, so it needs to be listed as a liability until
> it's paid to the state at the end of each month.
>
> Since each taxable sale typically includes a percentage of state tax,
> county tax, and possibly city tax, it would be great be able to set up
>
> all the common state/county/city combinations and be able to choose one
> to automatically funnel the taxes to the proper liability accounts at
> the time I enter the amount of a sale into the checking account. Then at
>
> the end of the month I need to be able to list the sales tax totals for
> the state and for each county and city to which sales tax is owed.
>
> Is this something gnucash can do at present? Please shed some light on
>
> this for me, or point me in the right direction. Thanks.
>
> Anthony Hertzler
> Integrity Buildings
>
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--
Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
Member, MIT Student Information Processing Board (SIPB)
URL: http://web.mit.edu/warlord/ PP-ASEL-IA N1NWH
warlord at MIT.EDU PGP key available
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