Invoicing - percent of labor not taxable

[Derek Atkins]

Hi,

Adjust the "Tax Rate" to be 80% of the rate.  You can compute this
relatively easily with a little algebra.

Let's say the tax rate is 5%, and you have $100 in billable labor.  Only
80% of that is taxable, so 0.8*100 = $80.  Then you take 5% of that,
.05*80 = $4.  In this example you could set up a tax table at 4%, which is
80% of 5%.

More generally for your case, your effective tax rate is 0.8*target tax rate.

-derek

On Tue, March 27, 2018 6:28 pm, Matthew Pressly wrote:
> Our state tax laws are such that most of the work that I do is
> considered "data processing" of which 20% is exempt and 80% is taxable.
> Is there a good way to configure GnuCash to handle that when making an
> invoice?
>
> I've thought of several approaches, but none seem very satisfactory:
>
>   * Make one line item in the invoice that reflects 80% of the labor
>     cost and mark that as taxable, then enter a separate line item for
>     the remaining 20%, so that every invoice has 2 line items. The
>     problem with this approach is that the line items no longer reflect
>     what was done (a description of the work completed) but rather are
>     used mainly to separate the taxable and non-taxable charges.
>   * Similar to above, I could just duplicate every line item (so if
>     there were 5 items, there would become 10) to make a taxable and
>     non-taxable line item for each piece of work completed. But that
>     seems cumbersome and would likely be confusing to clients.
>   * Another approach could be to set the tax rate to 80% of the actual
>     tax rate.
>
> Do you have any other suggestions about how to approach this?
>
> I've searched quite a bit for an answer for this question (both in
> GnuCash and with other, separate invoicing products) but haven't been
> able to find anything conclusive.
>
> What I'm currently doing is using a spreadsheet template for invoicing.
> I've added separate columns for the 80% taxable and 20% non-taxable
> breakdown of each item, then compute tax accordingly. This works, but it
> is cumbersome.
>
>
> --
> Matthew
>
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>


-- 
       Derek Atkins                 617-623-3745
       derek at ihtfp.com             www.ihtfp.com
       Computer and Internet Security Consultant