Tax Configuration for US clients

Tax Configuration for US clients

Before you begin

This article is intended only for US clients using Khaos Control Cloud, if you are based outside the USA please do not use this guide as serious tax issues may occur.

Overview

Our Training Team will cover the initial setup of your system with you, however, the settings below should be set as per this guide and not as per our training system. Before starting the setup of your system please notify support@khaoscloud.com to enable US Tax rules on your system, this will allow our TaxJar integration to be setup on your system which will control your sales tax rules.

Khaos Control Cloud has the ability for US clients to record their sales nexus on the system. When using this feature, the system will use your state nexus settings to determine whether or not sales tax should be applied to sales orders from that state. In order to determine the amount of sales tax we will use our US Tax integration, TaxJar.

Setup

State nexus should be setup prior to sales orders where the nexus applies, being entered on to your system.
The system will not retrospectively update these sales orders or your system accounts.

To setup a state nexus:

  1. Go to [System Setup | System Data | US States].
  2. Click Edit.
  3. For each state where you have a tax nexus:
    1. Enable the HAS NEXUS checkbox.
    2. If your tax nexus is due to a physical presence in the state, enter the address of that presence.
  4. Click Save Screen.

Configuration

System Values

Sales Tab

  1. Sell Prices are Net - Enabled

Purchasing Tab

  1. Purchase Prices are Net - Enabled
  2. Purchase Discount Net - Enabled

Accounts Tab

  1. VAT based on delivery address? - Set as per your state requirements for sales tax (this is usually the delivery address).
    1. Based on delivery address.
    2. Based on customer address.
    3. Based on invoice address.
  2. Override Delivery Rate - This should be disabled if sales always incur tax on shipping.
    1. Enable if your state does not require tax on shipping.
    2. Enable if your state does not require tax on shipping for orders exempt from tax.

Specification

Accounts --> US Tax Integration

Configuration Tab

Your Applications Trainer or our Support Team will provide you with the Testing Token and the Live token to use for the TaxJar integration. Once these have been set, continue to the Product Tax Codes tab.

Product Tax Codes Tab

This screen allows you to see all of the product tax codes available for use by KCC. If you require a product tax code / category that is not present, please contact support@khaoscloud.com. To populate the grid:
  1. Click Edit followed by Actions.
  2. Select Update Product Tax codes.
  3. Finally, click Save Screen.
Once the grid has been populated, you will need to then assign the product tax codes to the Level 2 Stock Types within [System Data].

Assigning Product Tax Codes to Level 2 Stock Types

Within [System Setup | System Data | Level 2: Type] you can assign the Product Tax Codes above to each stock type as required. Whilst we can't advise you regarding which product tax code your stock types fall into, if the code you require is not in the list please notify support@khaoscloud.com and we will notify our US Tax integration partner, TaxJar, so we can rectify this issue.