Sales Tax - How To's
How to Understand Sales Tax in 1place
Sales Tax in 1place is calculated using the Sales Tax Code assigned to each customer.
Each Sales Tax Code contains the applicable tax rate for a specific tax region. When a customer creates a Quote, Sales Order, or Invoice, 1place uses the customer's assigned Sales Tax Code to calculate the appropriate sales tax.
The Sales Tax Code is normally determined using the Ship-To Address ZIP Code. 1place also provides a setting that allows the system to use the Bill-To Address ZIP Code instead when calculating sales tax.
To simplify tax setup, 1place provides three Tax Code Creation Methods, allowing businesses to choose the level of automation that best suits their workflow.
Important: The Tax Region Name and Tax Rates are provided as a public service by Avalara Sales Tax. The rates are believed to be accurate but are not guaranteed. Your company is ultimately responsible for verifying that all tax rates are accurate before using them.
How to Access the Sales Tax Settings
To access the Sales Tax settings:
- Click the Settings (gear icon) located in the upper-right corner of 1place.
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Select Settings.
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Navigate to Sales → Sales Taxes.
The Sales Taxes screen allows administrators to:
- Configure the Tax Code Creation Method.
- Maintain Sales Tax Codes and tax rates.
- Refresh the Sales Tax Code list.
- Synchronize Sales Tax Codes with customer records.
How to Choose a Tax Code Creation Method
1place provides three methods for assigning Sales Tax Codes.
Manual Sales Tax Code Creation
With the Manual method, Sales Tax Codes are created and assigned entirely by the user.
Users are responsible for:
- Creating Sales Tax Codes.
- Assigning Sales Tax Codes to customers.
- Maintaining tax rates manually.
Semi-Automated Sales Tax Code Creation
The Semi-Automated method recommends a Sales Tax Code based on the customer's Ship-To Address ZIP Code, unless the setting to use the Bill-To Address for sales tax calculation is enabled.
The suggested Sales Tax Code is presented to the user for review before it is assigned.
Automated Sales Tax Code Creation
The Automated method automatically assigns the appropriate Sales Tax Code using the customer's Ship-To Address ZIP Code, unless the setting to use the Bill-To Address for sales tax calculation is enabled.
No user confirmation is required.
How to Refresh the Sales Tax Codes
Before assigning Sales Tax Codes to customers, it is recommended to refresh the Sales Tax Code list.
To refresh the Sales Tax Codes:
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Open Sales Taxes Settings.
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Click Refresh Sales Tax Codes.
This function:
- Downloads the latest Sales Tax Codes from the master database.
- Updates the Sales Tax Rates table using the latest Avalara tax information.
- Replaces any manually edited Sales Tax Rates.
Warning: Any manual modifications made to the Sales Tax Rates table will be overwritten.
How to Refresh Sales Tax Rates for All Customers
After refreshing the Sales Tax Codes, you can synchronize every customer's Sales Tax Code with the updated Sales Tax Rates table.
To refresh Sales Tax Rates for all customers:
- Open Sales Taxes.
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Click Refresh Sales Tax Rates for ALL Customers.
The system will:
- Review every customer record.
- Update each customer's assigned Sales Tax Code using the current Sales Tax Rates table.
- Ensure customer tax assignments remain synchronized.
How to Assign a Sales Tax Code to a Customer
Each customer should have a Sales Tax Code assigned before creating taxable transactions.
To assign or update a Sales Tax Code:
- Open Customers.
- Select a customer.
- Open the Settings tab.
- Locate the Sales Tax field.
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Select the appropriate Sales Tax Code from the dropdown list.
- Save the customer.
The available Sales Tax Codes are maintained under:
Settings → Sales → Sales Taxes → Sales Tax Rates
Users with the appropriate permissions can manually edit Sales Tax Rates when necessary.
How to Calculate a Customer's Sales Tax Code
If your company uses the Semi-Automated Tax Code Creation Method, you can have 1place recommend the appropriate Sales Tax Code.
To calculate the Sales Tax Code:
- Open the customer's record.
- Select the Settings tab.
- Click Calc Tax Code beside the W9 field.
- Review the suggested Sales Tax Code.
- Save the customer.
The selected Sales Tax Code is stored with the customer and used for future transactions.
How to Assign a Sales Tax Code During Order Entry
If a Sales Order is created for a customer without an assigned Sales Tax Code, 1place displays a Missing Tax Code or ZIP Code message when the order is submitted.
To assign a Sales Tax Code:
- Locate the Order Total Summary section.
- Click Calc Tax Code.
- Allow 1place to calculate the appropriate Sales Tax Code.
- Submit the order.
The assigned Sales Tax Code is automatically saved to the customer's record and will be used for future transactions.
How Sales Tax is Calculated
When processing a transaction, 1place follows these steps:
- Reads the customer's Billing Address ZIP Code.
- Determines the appropriate Sales Tax Code.
- Applies the tax rate associated with that Sales Tax Code.
- Calculates the sales tax on the transaction.
- Saves the assigned Sales Tax Code to the customer record for future use.
Sales Tax Best Practices
To ensure accurate tax calculations:
- Refresh the Sales Tax Codes before configuring customer tax assignments.
- Run Refresh Sales Tax Rates for ALL Customers after updating the Sales Tax Codes.
- Ensure every taxable customer has an assigned Sales Tax Code.
- Use Calc Tax Code whenever a customer does not already have a Sales Tax Code.
- Be aware that sales tax is calculated using the Ship-To Address ZIP Code by default. If your company uses the Bill-To Address for sales tax calculations, verify that the corresponding Sales Tax setting is enabled.
- Verify Sales Tax Rates periodically to ensure compliance with local tax regulations.
- Remember that Avalara tax rates are provided as a reference. Your organization is responsible for verifying that all applicable Sales Tax Rates are accurate.
