Sales Tax Overview
Sales Tax Overview
The way DesignSmart deals with sales tax depends on the accounting system your firm uses.
Sales Tax is Set By Category and By Project Address
It is helpful to remember that for almost all design firms tangible materials, like chairs, rugs, tables, beds, lighting will be taxable. However, a project might be in a state that doesn't charge sales tax, or your firm might not collect sales tax in a particular state. In these cases, the sales tax for the project will be “Tax Exempt” or 0%. This means that even though the materials are taxable, the sales tax will still be $0.00 because the project is not taxable.
QuickBooks Users
If your firm uses QuickBooks Online or QuickBooks Enterprise, DesignSmart will use the same sales tax settings as those in QuickBooks. For example, if freight is non-taxable in QuickBooks, it will be non-taxable in DesignSmart. If materials are taxable in QuickBooks, like they are 99% of the time, then they will be taxable in DesignSmart.
Non-QuickBooks Users
The same theory applies to non-QuickBooks firms; the only difference is that you will need to let DesignSmart support know which products and services are taxable, and we'll configure your system accordingly.
Adjusting Taxes At The Item Level
Occasionally, it is necessary to change the tax status. For example, let's assume that freight is usually not taxable; however, let's consider a specific freight charge that requires taxation. In that case, you can click on the Edit Taxes button on the Item Detail View to change the tax status.
In the image below, freight is not being taxed because the switches next to Freight are off (gray). If you you needed to tax the freight for this one example, then you would click on the switches so they were blue.
Sales Tax “Ts"
In the image above you can see some “T”s. Those indicate that the cost of the item and the markup are taxable. If you turn on the switches for Freight, you'd see Ts next to the Freight amounts.
Important - If the markup (abbreviated as MU above) is taxable for the item, then the markup will be taxable for any subcharge. For clarity, DesignSmart doesn't show the Ts for subcharge markups.
Don't See the T's?
If you don't see the Ts on the pricing tab and want to see them, then go to the Personal Settings page and turn them on.