Comp Tax Presenter : Kara Moore

In this session we will cover… What is comp tax? How to setup and maintain your system An example of applying comp tax to AP invoices How to run comp tax reports How to generate invoices to pay comp tax An example of using AP invoices to make adjustments

What is comp tax? Use tax - compensating for sales tax Incurred when goods are purchased If sales tax was not collected From vendor outside WA state From vendor not authorized to collect sales tax Amazon Private party

How is comp tax calculated? Same calculation as sales tax Based on value of goods when first used in WA Usually purchase price Tax rate where the goods were first used Include freight, delivery, or shipping charges

DOR Washington State Department of Revenue www.dor.wa.gov Tax rate charts published quarterly Location-based lookup My Account E-file Binding tax ruling via secure messaging

Comp tax rates - DOR

More information Reference codes RCW 82.12 RCW 82.14 WAC 458-20-178

Setup and Maintenance System Options Summary Account AP ACH Vendor Profile Comp Tax Setup

System Setup System Options (SA\FM\II\SO) Comp Tax Vendor

System Setup Payroll Tax Information Options (SA\FM\FM–Payroll) Setup UBI Number

Summary Account AP Comp Tax Summary Account (FM\SE\CO\AM\SA) ** L 611 0000 or ** L 630 1000

Deselect checkbox on Show All Summary Accounts Choose A/P Comp Tax on Summary Account Type Filter Add new summary account, if needed Select new default summary account Click Default Account, then ok AP Comp Tax Summary Account (FM\SE\CO\AM\SA) To make changes:

AP ACH Setup Bank Setup (WF\AP\AP Setup\ PS\CF\AC) WA ACH Comp Tax Payment Setup

Vendor Profile Dept. of Revenue AP ACH Setup WF\VE\VP\AC)

Comp Tax Setup Tax Districts Tax Type Codes Tax Rates Sites

Tax Districts Defined by DOR Set up by location(s) your district receives goods Recommend using DOR codes and descriptions

Tax District Setup (FM\AP\CT\SE\CT\TD)

Tax Type Codes Stores code and description Set up per DOR requirements Sales Local Transportation Other types Set up per DOR requirements Indicate if local

Tax Type Code Setup (FM\AP\CT\SE\CT\TT)

Tax Rates Stores current and historical rates Includes rates for each Tax District Add new records as rates change AP Invoice date drives which rate is used

Tax Rate Setup (FM\AP\CT\SE\CT\TR)

Sites Shipping destination Attach to Tax Districts School or other building within district Warehouse Attach to Tax Districts Selected during AP Invoice entry Shared with Fixed Assets module

Site Codes Setup (FM\AP\CT\SE\CT\SI)

Apply Comp Tax to AP Invoices Invoice type: YMA Comp Tax is calculated on entire invoice Cannot edit detail lines Invoice Type: YDA Comp Tax is calculated on individual detail lines Each detail line can be edited

AP Invoices With Comp Tax

Comp Tax Reports Comp Tax Status Report Comp Tax Generated Invoice Report Comp Tax Reporting Totals

Comp Tax Status Report View source invoices Reconcile L 611 (or 630) Sequence options Vendor Invoice Date Cash Account Comp Tax Status

Comp Tax Status Report

Comp Tax Generated Invoice Report Elements of generated invoices Lists source AP invoices Multiple invoices Funds Bank Cash Accounts

Comp Tax Generated Invoice Report

Comp Tax Reporting Totals Generated invoice(s) No source invoice(s) Fill out Excise Tax Reconcile Comp Tax

Comp Tax Reporting Totals

Generate Invoices to Pay Comp Tax Electronic payment requirements Monthly - online Quarterly - online Annually – online or by mail

Source AP Invoices - Reqirements To be pulled into Generated Comp Tax Invoice Must be flagged for Comp Tax Invoice date must be on or before the cutoff date History status – paid and updated Not previously selected for Comp Tax

Comp Tax Selection – Generate Invoice Select cash account If more than one, process must be done again Choose cutoff date Invoices beyond this date will not be pulled in Verify totals Enter invoice creation parameters

Generating Invoice for DOR After clicking Generate Inv: After clicking Yes:

Use AP Invoices to Make Adjustments ISSUE – Comp Tax owed to the DOR needs to be increased; and those changes need to be reflected on a Comp Tax Generated Invoice and included on Comp Tax Reports. Example as to why this might be necessary: A user entered a YDA Invoice and didn’t mark one of the Line Items for Comp Tax. The AP Invoice is now in History status.

Use AP Invoices to Make Adjustments Solution – To increase the amount of Comp Tax, do the following: Add a Source AP Invoice to accrue the extra Comp Tax owing, with Line Item amounts that total $0.00 Batch Update to Open status and run through the Check Register After this Source AP Invoice is in History status, the tax increase will be available to generate

Adjustments PO Number Vendor Accrual Account Comp Tax box Comp Tax Site Invoice Date Bank Cash Account When adding an AP invoice for adjustments, use the same data as the original invoice for these fields:

Adjustments Unique Batch ID YDA Layout Zero dollars ($0.00) for Invoice amount Tax Other When adding an AP invoice for adjustments:

Add first Detail Line Select the Taxable option and ensure Site is correct In Unit Cost, enter the taxable amount Amount that was not flagged that will generate the desired tax amount

Add offsetting Detail Line Do not select the Taxable option No Site selected In Unit Cost, enter the negative amount to offset the first detail line

Verify the invoice Click Show Comp Tax on the Invoice Entry screen to see the Calculated Comp Tax amount on the $0.00 total invoice:

Adjustment to reduce Comp Tax Similar process as adjusting to increase Follow same steps Detail line with negative amount is flagged taxable Detail line with positive amount is unflagged

Questions? Thank you!

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