Updated Use Tax Best Practices!

My Best Practices Guide for Use Tax in Dynamics GP has been updated to include the Reverse Tax Charges options available in Dynamics GP. If you have use tax needs and want to know what options are available out of the box, this is the document for you.

The guide is free. Get it here.

Tracking Use Tax in Microsoft Dynamics GP | Dynamics University

Gina Hoener offers a great option for Tracking Use Tax in Microsoft Dynamics GP . I will add this as another option to my Use Tax Best Practices Guide.

Capturing Purchase Use Tax on Payables Transactions | onza blog

Onza looks at Capturing Purchase Use Tax on Payables Transactions

I feel like this is a good time to plug my Use Tax for Dynamics GP Best Practices Guide available for free on the Best Practices page.

Weekly Dynamic: DynamicZip and Project Accounting

We ran into an issue with DynamicZip and Project Accounting recently so I thought I would share here.

DynamicZip is a Sales and Use Tax ISV solution for Dynamics GP. We ran into an issue where the account substitution wasn’t working the way we wanted it to for Invoice/Matching. In the end it turned out to be a conflict between Project Accounting's ability send the tax expense to the same account as the purchase and DynamicZip’s ability to do the same thing. Specifically:

• Default GP can use the tax detail account as the tax expense to debit via the Purchase Taxes in Project Costs in Project Accounting.
• This project accounting setting overrides the tax expense with the PA Purchase account
  • So in a non-DynamicZip environment this would be the behavior we want

• DynamicZip changes the behavior of the tax detail account to be liability account (a credit)
• What’s happening is that project accounting was overriding the tax account with the purchase account, then Dynamics Zip was swapping it out to be the credit.
• Since DynamicsZip was already setup to use the purchasing account on these transactions, this PA setting was redundant and it was conflicting with PA .

The answer was to uncheck Include Purchase Taxes in Project Costs box.

Unfortunately, unchecking this box with open transactions results in an error and the box does not uncheck. As a result, we had to  change this setting via SQL using the command:

update pa41701
set paincprchtxprjcst=0

This will only affect new transactions so we still needed to open the distributions on any unposted Shipment/Invoice or Invoice Matching transactions and use the default button on the distributions window to reset the accounts.

Weekly Review: Use Tax, Landed Cost and Project Accounting

So you are running Project Accounting. You purchase materials for your project and you want to include use tax paid for those line items in the appropriate project. Well, with Dynamics GP 10 it's not all that hard to do. I'll be putting out Use Tax paper soon with every last detail but for those of you with a little experience, here are the steps.

• Run the Use Tax amount through AP
• Apply this amount to a PO receipt via Landed Cost
• Landed cost can be used to calculate the Use Tax amount and apply it to line items based on the value of the line item.
• If you apply the line items directly to a project, the landed cost total flows through to Project Accounting.
• If you simply post the amounts to inventory with landed cost applied, that cost flows through to Project Accounting when transferring inventory amounts to PA using the inventory transfer functionality.

The beauty of using the landed costs functionality is that it flows all the way through to whatever module is downstream and that included Project Accounting.

There are more Use Tax tips in my Best Practices Guide to Use Tax for Dynamics GP.

 

Posted by Mark at 3/16/2009 10:00:00 AM

Feature of the Day: Date Effective Tax Rates - Inside Microsoft Dynamics GP

In a new Feature of the Day, Pam Misialek looks at Date Effective Tax Rates in Dynamics GP 2010. David Musgrave thinks that I incorrectly gave him credit for this feature but I did cover it in the 50 Tips session at Convergence.

Phew! I finally beat Pam to something!

Get the Complete Guide to Use Tax before it goes away

My  Complete Guide to Use Tax in Dynamics GP is will be unavailable for a while while I rework it. If you want the current version grab it before Friday. It goes away for a while this weekend.

Weekly Dynamic: Use Tax in Payables

Richard Whaley loves this tip so he get credit for it. It's not unusual for companies to have to self asses Use Taxes on items they buy. Often it's an out of state or different country vendor who doesn't charge tax. To process an AP invoice and accrue the tax is pretty simple.

1) Setup the tax as you would a sales tax in GP with all the relevant rules and jurisdictions. For example, here in Orlando, we have a state use/sales tax and a local option on top of that.

2) Setup a credit card for Use Tax for that jurisdiction

3) Process the payable, applying the Use Tax in the tax line just as you would do with sales tax.

4) Pay the Use Tax amount with the Use Tax credit card you setup in #2.

This leaves the correct payable in AP and sets up a payable to the taxing authority to be paid at month end along with providing a trail in the GL of how you got there.

Sadly, it's not this easy with Purchase Order Processing, especially when you need to apply the accrued tax to the line items. But for AP, this technique works great!

Update: Richard has emailed to say that this tip originally came from Leslie Vail so she deserved the credit. Thanks for the great tip Leslie!