Setting up the Master Tax Schedule

Tax schedules are created in Microsoft Dynamics GP to automatically calculate sales tax on an invoice. You can select a tax schedule in the Service Management Location and Service Invoice windows or when creating the customer record in Microsoft Dynamics GP.

You can customize a Microsoft Dynamics GP master tax schedule in Service Management. Depending on where you do business, you may not charge tax for a specific cost category or you may want to assign different Microsoft Dynamics GP tax schedules to different cost categories. When a Service Management invoice is created, sales tax is calculated by cost category per the customized Microsoft Dynamics GP tax schedule selected for equipment, labor, material, subcontractor, and other cost categories.

You can also have more than the standard five cost codes for service costs, by creating sub cost codes to the Other cost code. Each sub cost code can have its own tax schedule, WIP/COGS accounts, etc. This is set up via the Other Costs Setup button. For more information on how to set this up, see Extended Pricing Matrix.

If you do not want to calculate tax for a cost category, assign a zero percent tax schedule. While marking the Exclude From Tax Calculation checkbox in the Master Tax Schedule Setup window will not calculate tax, you will receive an incorrect total sales amount in the Invoicing Tax Detail Entry window. See Microsoft Dynamics GP documentation.

Select Microsoft Dynamics GP > Tools > Service Management > Invoice Setup > Master Tax Schedule.
Complete the following fields, as necessary.
- Master Tax Schedule ID
  Select an existing schedule from the lookup. Tax schedules are created and maintained in Microsoft Dynamics GP. You can zoom on the Master Tax Schedule field to view tax details.
- Tax Schedule ID
  Assign a tax schedule to each cost category. Your selection in the Master Tax Schedule ID field defaults for each cost category.
- Exclude From Tax Calculation
  Mark this checkbox if a cost category is tax-exempt.
  
  This option only applies to regular service invoices. To exclude taxes on contracts, we recommend that you set up a tax detail that has a 0.00% tax rate. Otherwise, you will have no details and the values of the billing amount and taxable amount of $0.00 do not show in the Microsoft Dynamics GP Tax Distribution.
Select Save.