Gnucash Business: Proposal: handling multiple tax accounts
13 Jun 2002 22:55:50 -0400
You're still not answering the question I'm asking... You're looking
at it from the customer point of view, not the merchant. I'm asking
from a merchant point of view.
Kevin Benton <KevinB@webex.com> writes:
> If my read of it is correct, the customer already paid sales tax.
> Therefore, you would use the formula...
> Price = Total / ( 1 + STAP )
> as below. You'd work backwards. If you don't, you wind up paying more tax
> as a merchant while your customer gets a free discount. :/
> Kevin Benton
> WebEx Communications, Inc. accepts no liability in relation to any personal
> emails, or any content of any email that does not relate directly to the
> business of WebEx Communications, Inc.
> -----Original Message-----
> From: Derek Atkins [mailto:warlord@MIT.EDU]
> Sent: Thursday, June 13, 2002 7:02 PM
> To: Kevin Benton
> Cc: Conrad Canterford; firstname.lastname@example.org
> Subject: Re: Gnucash Business: Proposal: handling multiple tax accounts
> Thanks, but this wasn't quite what I was asking. I was asking a
> procedural question, not a mathematical question. I was asking how
> the process works for determining prices; do you start with the final
> price and work backwards, or do you work forwards? Following that,
> does it imply that the "TaxIncluded" flag means work backwards, too?
> That would mean that you enter the final price and the tax is computed
> backwards from that? It also doesn't answer the "where do you set the
> TaxIncluded flag" question....
> But thanks for making the math simple for others on the list ;)
> Kevin Benton <KevinB@webex.com> writes:
> > Anyone who operates a vending machine business has this problem. A little
> > algebra helps on this one.
> > Total is the total advertised price (including tax)
> > Price is the actual price without sales tax.
> > For this equation, STAP is the Sales Tax Aggregate Percentage including
> > taxes.
> > Total = Price * (1 + STAP)
> > Since the total and tax rates are known, we need to get price by itself.
> > First, let's get Price on the left like we're used to...
> > Price * (1 + STAP) = Total
> > Then, what we do to the left side, we must do to the right.
> > Price * (1 + STAP) / (1 + STAP) = Total / (1 + STAP)
> > Price = Total / (1 + STAP)
> > Try it for yourself - plug in the numbers off a receipt you've been given
> > and see if it works both ways.
> > $1.00 item taxed at 5% requires a payment of $1.05.
> > Price = $1.05 / (1 + 0.05) = $1.00
> > Imagine that... :) Now you know how to compute sales tax backwards and
> > forwards. :)
> > Kevin Benton
> > WebEx Communications, Inc. accepts no liability in relation to any
> > emails, or any content of any email that does not relate directly to the
> > business of WebEx Communications, Inc.
> > -----Original Message-----
> > From: Derek Atkins [mailto:warlord@MIT.EDU]
> > Sent: Thursday, June 13, 2002 5:59 PM
> > To: Conrad Canterford
> > Cc: email@example.com
> > Subject: Re: Gnucash Business: Proposal: handling multiple tax accounts
> > Conrad Canterford <firstname.lastname@example.org> writes:
> > > To do it properly, its a little more complicated than that. In
> > > Australia, an extra option "Tax included" would also be appreciated, as
> > > a large number of small businesses (and especially any retail business)
> > > will advertise and invoice the *tax inclusive* price. Asking whoever is
> > > doing the accounts to deduct the tax from every invoice as its entered
> > > is not going to make you any friends... :-)
> > Where should this "tax included" option be stored? Since prices
> > are advertized with-tax, how is the tax calculation made?
> > > I think a global table would be preferable. If someone is running
> > > multiple entities, this might save them re-entering a lot of data. If
> > > they are not, well it makes no difference to them.
> > What do you mean, "global table"?
> > > > b) How do you reference tax tables for "posted" entries?
> > > > - Tax Tables are immutable.
> > > > - Tax Tables are mutable until they are "used" (at which point
> > > > they become immutable).
> > >
> > > Personally, I'd go for this one.
> > >
> > > > I think this might be too confusing for a user.
> > >
> > > Why? A simple dialog pops up saying "I'm sorry, but this entry is in use
> > > by an invoice and cannot be changed.".
> > >
> > > > - Tax Tables are mutable, however when you post an invoice the
> > > > Tax Table code creates an internal, immutable copy that is
> > > > linked to the mutable tax table in question.
> > >
> > > This is really just an enhanced version of (b) as far as I'm concerned.
> > > Basically (if you think of it the other way around), when the user goes
> > > to change a tax table entry that's been used, the system automatically
> > > creates a new version of that entry and isolates the old one. This is
> > > just as prone to confuse a user as (b). However, I think any of the
> > > other options are also likely to confuse users, just in different ways.
> > The reason I prefer this last appoach is that:
> > 1) to the user, the tax table is always mutable. They can change it
> > at will, but
> > 2) any posted invoices will refer back to the tax table that existed
> > when it was posted, and
> > 3) all the magic happens under the covers, as far as the user is
> > concerned, and
> > 4) it will save space by reusing tax-tables as much as possible.
> > Thanks for your feedback.
> > -derek
> > --
> > 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@MIT.EDU PGP key available
> > _______________________________________________
> > gnucash-devel mailing list
> > email@example.com
> > https://lists.gnucash.org/mailman/listinfo/gnucash-devel
> 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@MIT.EDU PGP key available
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@MIT.EDU PGP key available