Sales Tax Module in CustomBooks™ | Rates, Agencies & Payments

Sales Tax Module in CustomBooks™

Overview

The Sales Tax module in CustomBooks™ provides tools for configuring, calculating, tracking, and paying sales tax. It allows businesses to maintain sales tax agencies and rates, determine which customers and items are taxable, apply sales tax to sales transactions, record sales tax payments, and review sales tax amounts owed.

CustomBooks™ provides built-in Sales Tax functionality and also supports integration with Avalara AvaTax for automated sales tax calculations. With the built-in functionality, businesses are responsible for configuring the appropriate tax rates and understanding the sales tax requirements that apply to their jurisdictions.

To access the Sales Tax module, select Sales Tax from the left menu panel.


Sales Tax Module at a Glance

The Sales Tax module provides a dedicated area for managing the main components of sales tax activity and is organized into three main areas:
  1. Documents – Record sales tax payments.
  2. Reports – Review sales tax liabilities and amounts owed.
  3. Lists – Manage sales tax rates, agencies, and sales tax details.

Documents

  1. Sales Tax Payments

Use Sales Tax Payments to record payments made to sales tax agencies. A payment can be associated with a specific agency, bank account, and period-ending date. CustomBooks™ also supports recording adjustments when the payment differs from the amount recorded by the system.

Reports

  1. Sales Tax Liability

The Sales Tax Liability report helps you review sales tax amounts owed for a specified period. Sales tax amounts can be reviewed by agency, making it easier to identify liabilities associated with individual tax authorities.

Lists

  1. Sales Tax Rates

Sales Tax Rates define the rates used to calculate sales tax. A rate can consist of a single tax component or combined components.
  1. Single Tax Rate – Contains one sales tax component associated with a tax agency.
  2. Combined Tax Rate – Combines two or more tax components, which may be associated with different tax agencies.
This structure allows businesses to represent tax rates that consist of multiple jurisdictional components.

  1. Sales Tax Agencies

Sales Tax Agencies identify the tax authorities to which sales tax is owed and paid. Agency records are used when creating sales tax rates and recording sales tax payments. Agency names must be unique within a CustomBooks™ account.

  1. Sales Tax Owed Details

Sales Tax Owed Details provides additional information about sales tax amounts owed and can be used to review sales tax activity in greater detail.

Together, these features provide the tools needed to maintain sales tax information, review liabilities, and record sales tax payments within CustomBooks™.

Understanding the Sales Tax Workflow

Sales tax management generally involves several related activities in CustomBooks™:
  1. Set up Sales Tax Rates 
    1. Maintain the appropriate sales tax rates that will be used for taxable transactions.
  2. Set up Sales Tax Agencies
    1. Maintain the tax agencies to which sales tax obligations are associated.
  3. Apply Sales Tax to Transactions
    1. When applicable, sales transactions use the configured sales tax information to calculate the appropriate tax amount.
  4. Review Sales Tax Owed Details
    1. Review detailed sales tax information to understand the amounts owed.
  5. Review Sales Tax Liability
    1. Use the Sales Tax Liability report to review sales tax liabilities for the applicable period.
  6. Record Sales Tax Payments
    1. When a payment is made to a tax agency, record the payment using Sales Tax Payments.
  7. Review Records
    1. Compare sales tax payments and outstanding liabilities to help ensure that sales tax records are complete and up to date.

Related Articles

For detailed instructions on using a specific Sales Tax Module feature, refer to the corresponding knowledge base article for that feature.