Tracking Use
Taxes in Microsoft Dynamics SL
Because Microsoft DynamicsTM SL does not have a built-in
method of tracking use taxes, we offer three options to enter and
operate with taxes manually.
From the following three options, you can select the option that
best fits your customers’ needs. The three options are: track the
use tax information in the Shared Information module; set up a Tax
ID for the use tax in the Shared Information module and set it to
calculate 0% tax; and enter a separate voucher in the batch to
account for the tax.
• Track the use tax information in the Shared Information module.
To track the use tax information in the Shared Information module,
create the use tax information in the original voucher. Then enter
an offsetting detail line in Accounts Payable > Voucher and
Adjustment Entry to reverse the effects of the tax on the voucher.
To help illustrate the steps, we will assume the original voucher is
for $1,000. The use tax associated with it would be 2% or $200.
Create a Tax ID for the use tax in Shared Information > Tax
Maintenance (21.280) for
2%. When setting up this tax, enter the
appropriate use tax expense account on the Purchasing Accounts tab.
1. Create the voucher in Accounts Payable > Voucher and Adjustment
Entry (03.010), entering the Tax ID for the use tax in the detail
line and allowing Microsoft Dynamics SL to calculate the $200 tax.
2. Enter an offsetting detail line to the sales tax payable
account for a negative amount of the $200 tax. This offsetting
record will allow the voucher to maintain the value of $1,000.
Verify that the Tax ID field for the offsetting detail line is
empty.
4. This entry will result in the following:
negative debit (which creates the effect of a credit) to the sales
tax payable account for the amount of the tax -$200
Debit to the sales tax expense account for the amount of the tax
-$200
Credit to the accounts payable account for the amount of the voucher
-$1,000
Debit to the default expense account for the amount of the voucher
-$1,000.
5. The Tax Detail report (21.660.00) in the Shared Information
module can be used to monitor the
entries to the Tax ID for the use tax. Also, the Detail General
Ledger report in the General Ledger module can be used to monitor
entries to the sales tax expense and sales tax payable accounts.
• Set up a Tax ID for the use tax in the Shared Information module
and set it to calculate 0% tax.
1. Create a Tax ID for the use tax in Shared Information > Tax
Maintenance (21.280) and set it to calculate a 0% tax.
2. Apply this Tax ID for the use tax to all appropriate items during
voucher entry. It will calculate to 0 dollars tax, but will track
the purchases subject to the tax.
3. At the end of the month, run the Tax Detail report (21.660.00)
for the use tax detail and calculate how much use tax is owed on the
purchases subject to the tax.
4. Create a voucher in Accounts Payable > Voucher and Adjustment
Entry for the amount of the use tax for the appropriate vendor, and
debit the appropriate expense account in the detail line.
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• Enter a separate voucher in the batch to account for the tax.
1. After entering a voucher for the amount of the invoice, enter a
second voucher for the amount of the use tax.
2. The vendor on this second voucher should be the state taxing
authority.
3. Replace the default accounts payable account listed on the
Override tab with the sales tax payable account.
4. Enter the sales tax expense account in the Transaction Detail.
Hint: when setting up this vendor in Vendor Maintenance (03.250.00),
set the default accounts payable account to the sales tax payable
account, and enter the sales tax expense account as the default
expense account. This would allow for easier data entry since the
overrides above would not be necessary.
Name: Kim Bateson
Role: Consultant
Team: Application Development Consulting (ADC)
Background: I provide consulting services in a variety of
areas which include support services, partner and customer training,
and assistance with escalation sites. Before joining Plumbline
Solutions, I worked for five years in Solomon Software Support as a
support engineer for the financial, payroll, and project management
accounting modules. In addition to my role as a support engineer, I
was also a team leader and technical lead. Prior to working at
Solomon Software, I was a CPA in public accounting. I have a
bachelor’s degree in Accounting and Finance and an MBA.
Likes best about consulting: Consulting is very enjoyable
from the perspective that I get to do something different every day.
It is also rewarding because I get to help partners and customers
find solutions that improve their daily business lives.
Hobbies: I enjoy golf, hanging out with my dog, teaching
children at church, and taking walks.
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