Setting Up Default Tax Jurisdictions
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Default tax rates are applied to taxable items on a sale. To modify the default tax jurisdictions:
1. | Choose Settings | Locations from the Tools menu. |
2. | Select the default location from the Location List. |
3. | Press the Modify button. |
4. | Press the Sales Tax tab. |
5. | Press the Edit Default Sales Tax Jurisdictions button. |
6. | Select an Available Jurisdiction from the list on the left. |
7. | Press the right arrow button to add the jurisdiction to the Current Jurisdiction list. |
8. | Continue to add jurisdictions as appropriate. |
9. | Press the OK button on the Select Tax Jurisdictions screen. |
10. | Press the Save button on the Edit Location screen. |
Tax rates are additive. For instance, if you have a State tax of 6% and a local tax of 1%, the total tax applied to a taxable item will be 7%. If your State or Government tax is taxed on the amount of the item plus any local taxes, you will have to calculate an effective tax rate based on the formula:
Effective Government Tax Rate = Actual Government Tax Rate * (1 + Local Tax Rate).