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Before You Begin

Install the System Manager, following instructions in Chapter 3 of the System Manager
Administrator Guide.
Make sure you select Tax Services as a component to install.
If you did not use the Setup Wizard, activate Tax Services using the Data Activation
feature in Administrative Services.
If you use multicurrency accounting, install the Sage Accpac ERP Multicurrency product.
Add currency information, if needed.
To limit access to various tasks, first define security groups for Tax Services, then assign
user authorizations.

Step 1. Gather Your Current Tax Records

Include manual records or printed listings of General Ledger sales tax accounts and sales
areas with their associated tax authorities.

Step 2. Add Tax Accounts to Your Chart of Accounts

Add the accounts you need for your tax data, such as tax liability, recoverable tax, and tax
expense accounts.

Step 3. Add Tax Authorities

Double-click the Tax Authorities icon in the Tax Services folder.

Profile Tab
Code and On the Profile tab, enter a unique alphanumeric code (up to 12 characters) in the Tax
Description Authority field and a description for the code (up to 60 characters) in the Description field.
Tax Reporting If you are using multicurrency accounting, select a currency used by each tax authority.
Currency (Note that you cannot change the currency after adding the authority.)
Report Tax on Use the drop-down arrow to select one of the following:
Retainage No Reporting
At Time of Retainage Document
At Time of Original Document
Maximum Tax If there is a limit on the tax charged on an invoice by the tax authority, type the amount in
Allowable the Maximum Tax Allowable field.
If Report Tax on Retainage is set to At Time of Original Document or At Time of
Retainage Document, this field is not available.
No Tax If the tax authority does not charge tax less than a minimum amount, enter that amount in
Charged Below the No Tax Charged Below field.
If Report Tax on Retainage is set to At Time of Original Document or At Time of
Retainage Document, this field is not available.
Tax Base Select an option (selling price, standard cost, most recent cost, alternate amount 1, or
alternate amount 2) in the Tax Base field to specify the base on which sales tax is
calculated.

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Report Level Select the Report Level (either At Invoice Level or No Reporting) to specify whether to
keep tax audit information for this authority. (Note that, if you selected No Reporting, you
can later edit the field when you are ready to accumulate tax information.)
Allow Tax in If taxes charged by the authority can be included in the selling price of the item, select the
Price option option, Allow Tax in Price. (Do not select this option if you have customers who are tax
exempt, since the tax will not be extracted from the item price.)
Accounts Tab Click the Accounts tab.
Tax Liability In the Tax Liability Account field, enter the General Ledger account to which amounts
Account calculated as sales taxes for this authority are to be posted, or use the Finder to select an
account.
Tax Select the Tax Recoverable option if the tax your company pays on purchases is
Recoverable recoverable from the tax authority. If you select this option, you must enter the
Recoverable Tax account to which recoverable tax amounts paid are posted in G/L, and
you must enter the Recoverable Rate (a percentage, using up to five decimal places). If
the rate you entered is less than 100%, you can expense the unrecoverable portion using
the Expense Separately option, or include the unrecoverable portion in the cost of the
item purchased.
Expense If you record tax as an expense, select the Expense Separately option, then enter the
Separately Expense Account number of the General Ledger account to which expensed tax is
posted. (You cannot leave this field blank.) Use the Finder to select an account.
Click Add, then print a list of the tax authorities you have added by choosing Print from the
File menu or by selecting the Tax Authorities icon in the Tax Reports folder.

Step 4. Add Tax Classes

Double-click the Tax Classes icon in the Tax Services folder.

Select a tax authority (from the list of the authorities you added in the previous step).
Trans. Type Select a Transaction Type (Sales or Purchases).
Class Type Select a Class Type.
If Sales is your Transaction Type, the Class Type options are Customers or Items.
If Purchases is your Transaction Type, the Class Type options are Vendors or Items.
Standard class Click in the first line of the column labeled Class, and enter a description for the first class
in the Description column. (This first class should be your standard taxable class.)
In the Exempt column, choose Yes or No by toggling between the choices.
Click Save.
Repeat the above steps for each remaining transaction type and class type.
Note: Tax classes for both types (customers and item, or vendors and item) must be
added or you will not be able to enter tax rates.
Print tax To print a list of your tax classes, choose Print from the File menu or double-click the Tax
classes list Classes icon in the Tax Reports folder.

Step 5. Add Tax Rates

Double-click the Tax Rates icon in the Tax Services folder.

Select a Tax Authority and Transaction Type.

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Rates Highlight a row, and enter tax rates for this authority.
Click Save, then print a list of tax rates for your records.
Print your tax To print a list of the tax rates you have added, choose Print from the File menu or double-
rates list click the Tax Rates icon in the Tax Reports folder.

Step 6. Add Tax Groups

Double-click the Tax Groups icon in the Tax Services folder.

Enter a code for the tax group, using up to 12 characters.
Transaction In the Transaction Type field, select either Sales or Purchases, then complete the
Type following fields:
Description Description. Type a name for the tax group, using up to 60 characters.
Source Source Currency. If your company has a multicurrency accounting system, select the
Currency currency used by this tax group. (The default currency is the companys functional
currency.)
Tax Calculation Select one of the following tax calculation methods (keeping in mind that the results of
method one method may differ from the results of the other method due to rounding):
By summary Calculate Tax By Summary. If you select this method, tax is calculated on the invoice
total, by multiplying the document amount by the tax rate.
By detail Calculate Tax By Detail. If you select this method, tax is calculated on each invoice
detail by multiplying the tax base times the tax rate. The total tax for the invoice is the sum
of the tax calculated for each detail line.
For each authority in the tax group, complete the following fields:
Authority code Authority. Select an authority code using the Finder. (Only authority codes using the
same source currency as the tax group will be in the list.)
Taxable tax Taxable. If the tax for the authority is taxable, toggle in that field until Yes appears.
Surtax. Toggle to apply a surtax on the specified tax authority.
Surtax on Authority. Select the tax authority that will be assigned a surtax.
Print your tax When you are finished adding tax groups, click Add, then print a list of tax groups for your
groups list records.
To print a list of your tax groups, choose Print from the File menu or double-click the Tax
Groups icon in the Tax Reports folder.

Step 7. Check Data Integrity and Back Up Your Data

To check data integrity and make backups, see the instructions in Chapter 11 of the
System Manager User Guide.

Your Tax Services program is now ready to use. Refer to the user guides for each Sage Accpac ERP
accounting program for detailed information about tax processing.

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