Taxes are configured at both the product type and location levels. This setup allows you to apply taxes accurately based on what you're selling and where the sale occurs.
Taxes are organized into individual entries called Tax Records.
A Tax Record represents a specific tax collected by a governing body (e.g., state, city, or regional authority).
Each product type and location can have multiple Tax Records assigned to it.
EX: If you sell fitness apparel at multiple locations, you can assign different tax records based on the city or state where each location operates.
What Is a Tax Record?
A Tax Record is a unique line item for a specific tax rate charged in a particular area.
Example:
Washington State Tax could be a Tax Record applied to all product sales in that state.
When a product is sold, Mariana Tek automatically:
Looks up the product type and sale location.
Applies each relevant Tax Record individually.
Combines the taxes for the final charge on the product.
Why Use Multiple Tax Records Instead of a Single Percentage?
While some systems use a flat tax rate per product, Mariana Tek reflects real-world tax structures, which often involve multiple tax authorities.
Real-World Example: Gnarlottesville
Imagine you operate in the fictional city of Gnarlottesville, where the total sales tax is 9.6%. This total tax includes:
6.5% for the State of Mountain View
2.7% for the City of Gnarlottesville
0.4% for the Regional Transit Authority (RTA)
In Mariana Tek, you would:
Create three separate Tax Records to reflect each portion.
Assign them to applicable products sold in your Gnarlottesville location.
Benefits of This Approach
Accurate Tax Reporting: Each portion of the tax is tracked separately.
Simplified Filing: When you run the Sales Tax Report (found under the Financial Reporting section), you’ll see taxes broken out by authority.
Compliance Made Easy: This setup ensures your filings match how taxes are assessed and collected.