Article #194 How to Set Up Multiple Taxes in Solid Business Central?

Answer: For companies that deal with more than two tax types, the Multiple Tax feature was developed to accommodate all of their taxation needs. This applies to companies with more than two taxes in their region, do business across multiple tax regions, or have additional charges such as deposits or environmental fees that need to be accounted for. Multiple Taxes is available to all Solid Route Accounting™ - Enterprise Edition users without any further licensing required.

NOTE: Once Multiple Taxes have been enabled in a company, this setting cannot be reverted to 'Standard Taxes'. However, Standard Taxes can still be created and used through the Multiple Tax feature, should the need arise to revert.

To Enable Multiple Taxes in Solid Business Central™:

1. In Solid Business Central™, navigate to [System / Configure / Company / Settings].
2. Near the lower right hand of this 'Settings' screen, in the right column of options, change the 'Taxes' field from 'S - Standard' to 'M - Multiple'.
3. A warning will display informing that this setting cannot be changed back to 'S - Standard'. Use the 'Y' key on the keyboard to accept this and continue back to the 'Settings' screen where this 'Taxes' field should now be set to 'M'. Use [CTRL+END] to save this change.

Two new menu items will now be available at [System / Configure / Company]. 'Tax Item' allows individual taxes to be specified, such as the aforementioned Standard Taxes, with 'State Tax' being one item and 'Federal Tax' being another Tax Item. 'Tax Group' allows those taxes to be grouped so that multiple 'Tax Items' can be assigned to a single customer or inventory item. For example, a Tax Group of 'Standard Taxes' may be created to apply both the State Tax and Federal Tax to a single customer or item.

To Create New Tax Items:

Tax Items allow the individual taxes that a company deals with to be specified within the Solid Route Accounting™ business system. Tax Items can then be assigned to customers and inventory items or grouped for the same purpose by using Tax Groups. To create Tax Items:

1. In Solid Business Central™, navigate to [System / Configure / Company / Tax Item], and use the [Insert] key to add a new Tax Item record.
2. In the 'Tax Item' field, enter a 1-4 character long ID for this Tax Item. This will be used to identify this item when creating Tax Groups and assigning customers or items to this Tax Item. Following this, a longer 'Description' can be entered, and the 'Tax Rate' can be set. As an example, if the tax rate is five percent, enter it as '5.000'.
3. If using the Solid General Ledger™, the account numbers for 'GL Sales Account' and 'GL Purchases Acnt' can optionally be entered as well.
4. Lastly, the 'Print Desc' is the 1-3 character ID that'll print on invoices and reports to identify this Tax Item. Similarly, the 'Print Char' is a one-character ID that's used in a few places throughout the Solid Route Accounting™ to identify this Tax Item as well.
5. When all has been entered, use [CTRL+END] to save this Tax Item record. The fields will then clear themselves so the next Tax Item record can be entered in right away. When finished adding Tax Item records, use the [Escape] key to leave the Tax Items area.

To Create New Tax Groups:

Tax Groups allow Tax Items to be combined to assign multiple taxes to a single customer or inventory item. Like this, any combination of Tax Items can be used to create a single Tax Group. To create a new Tax Group:

1. In Solid Business Central™, navigate to [System / Configure / Company / Tax Group], and use the [Insert] key to add a new Tax Group.
2. In the 'Tax Group' field, enter a 1-4 character long ID for this Tax Group. This will be used to identify this group when assigning customers or items to this Tax Group. Following this, a longer 'Description' can be entered as well.
3. When left at 'N' for No, the 'Print Items' field will print this Tax Group on invoices as the ID set in the 'Tax Group' field. If this 'Print Items' option is set to 'Y', however, then the individual Tax Items that make up this group will print on the invoices instead.
4. The last step in this Tax Group creation process is to decide which Tax Items to assign to it. From within the 'Unallocated Tax Items' box, highlight a Tax Item to add to this Tax Group, and use the [+] Plus key on the keyboard to add it to the 'Allocated Tax Items' box on the right. (To remove a Tax Item from a group, highlight it in the 'Allocated Tax Items box and use the [-] key to return it to the 'Unallocated Tax Items' box.)
5. When this Tax Group is all set, use [CTRL+END] to save this Tax Group record. The fields will then clear themselves so the next Tax Group record can be entered in right away. When finished adding Tax Group records, use the [Escape] key to leave the Tax Groups area.

To Assign Customers to a Tax Item or Tax Group:

1. In Solid Business Central™, navigate to [Datafile / Customer / View], and either display the desired customer and use [F2 – Edit] to make changes to that record, or follow the steps below if inserting a new Customer Record.
2. In the 'Tax ID' field, enter in the Tax Item ID or Tax Group ID for this customer to be assigned to. When this record is saved with [CTRL+END], it'll now be assigned to those taxes. For tax exemption, leave this 'Tax ID' field blank.

To Assign Inventory Items to a Tax Item or Tax Group:

1. In Solid Business Central™, navigate to [Datafile / Inventory / View], and either display the desired item and use [F2 - Edit] to make changes to that record, or follow the steps below if inserting a new Inventory Record.
2. In the 'Tax ID' field, enter in the Tax Item ID or Tax Group ID for this item to be assigned to. When this record is saved with [CTRL+END], it'll now be assigned to those taxes.

NOTE: It is suggested to create a new Tax Group called 'ALL' and assign all the Tax Items (i.e. GST, PST, HST, etc.). Then assign a TaxID of 'ALL' to all taxable inventory items.

The system will look for a common TaxID in the customer and inventory item before charging taxes. This means that:

1. If a customer has a TaxID of GST, and the inventory item has a TaxID of ALL (GST+PST+HST), GST will be charged
2. If a customer has a TaxID of HST and the inventory item has no Tax ID, no taxes will be calculated
3. If a customer has no TaxID and the inventory item has a TaxID of ALL, no taxes will be calculated
4. If a customer has a TaxID of HST, and the inventory item has a TaxID of ALL (GST+PST+HST), HST will be charged