Issue Credit Memo for Sales Tax Refund / Reduction and Reflect on Sales Tax Reports

Scenario:

·         Tax Amount will no longer be collected or Tax Due will be decreased but the invoice was already posted in closed period

·         Request to create a Credit Memo for the Sales Tax portion only

 

·         Create Invoice from Sales Order or via Transactions> Sales > Create Invoices

·         Example:

·         Item 1

·         Amount = 1,200.00

·         Tax Code = CO_ADAMS CO_AKFG_EICR

·         Tax Rate = 4.75%

·         Tax Amount = 57.00

·         Total  = 1,257.00

 

Findings: Enhancement# 70073 - Transactions > Credit Memos > Provide the ability to issue credits for Sales Tax only when a Customer is overcharged for Sales Tax

Alternate Solution:

·         Create an Other Charge for Sale or Other Charge for Resale item under Lists > Accounting > Items > New that will serve as a clearing item

·         Sample Name :  Tax Reversal (Misc. Item)

·         Open the Invoice

·         Click Credit

·         Enter the following line items under the Items tab > Items sub tab of the Credit Memo:

·         Line 1:

·         Tax Reversal (Misc. Item)

·         Rate = 1,200.00

·         Tax Code = CO_ADAMS CO_AKFG_EICR

·         Tax Rate = 4.75%

·         Line 2:

·         Tax Reversal (Misc. Item)

·         Rate = (1,200.00)

·         Tax Code = -Not Taxable-

·         Tax Rate = 0.0%

·         Mainline should now show the following figures:

·         Subtotal = 0.00

·         Tax Total = 57.00

·         Total = 57.00

·         Unmark then mark the Apply check box for the Invoice

·         Payment Amount = 57.00

 

·         Amount Due for the invoice will now reflect the exclusion/decrease of tax amount in the A/R Aging Report

·         Sales Tax Liability (Tax Due) for the sales transaction will now:

·         Be zero/decreased in the Tax Reports (i.e. Sales Tax on Sales)

·         Not show up /reduced in Transactions > Bank > Pay Sales Tax (US Nexus)