Taxes cannot be avoided - we all owe them and have to pay them. The trick is having a system that manages all of your tax requirements regardless of how they need to be calculated. Paragon supports automatic sales tax calculation by location, item, or company.
Some of these features may require rules to be configured - please contact firstname.lastname@example.org for help if needed.
Create and edit tax codes and rates
To start calculating taxes throughout Paragon, you have to first confirm all required tax codes exist as attributes and have been linked to percentage rates. From any screen, click the settings button at the top right.
Click on attributes setup, which is found under the attributes card.
Tax is set up as an attribute in Paragon.
The tax attribute modal will open. Click the next button.
The attribute type modal will appear. The default for tax is set as a list to choose from attribute, so click the next button again.
This is where you enter the tax codes you want to have in your system. To add a new tax code, click the add new attribute value button.
Once you're done, click the next button and follow the prompts to save your changes.
Now that the tax codes have been created in the system, it is time to enter the various tax rates that will be used.
On the right-hand side, click the edit button.
Click the add a new tax code button on the grid to add a new rate and select the tax code from the drop-down list.
Mandatory fields are marked with a red asterisk (*) and much be filled before saving.
rate - Enter the tax percentage.
compound - Indicate whether the tax calculation can be accumulated with another tax rate.
If you sell to a region that has multiple taxes calculated on top of each other, you must specify if the tax scenario you are creating needs to be compounded (ie: added to the previously calculated tax value on a specific transaction) or not.
type - Select the type of tax that is being used.
- If you're entering taxes that are being applied to customers when creating transactions and are based on their location, select location.
- In some provinces in Canada children's clothing has a special tax (for example). In this case, the tax being charged on children's clothing would be an item tax. The tax can be applied to a product in the product setup.
- If your customer is part of a particular tax program, for example, they're a federal agency, they may have a special tax rate. In that case select company. The tax can be applied to a customer in the customer setup.
When setting up taxes, keep in mind that item tax supersedes customer tax. Meaning that if both the customer and the product on a transaction are assigned a tax attribute, the tax automatically calculated on the transaction will be the product's tax. If on the same transaction, there is another product that isn't assigned a tax attribute, the tax on this product will be the tax of the customer
calculation order - If the tax is compounded, enter the order in which it will be calculated.
The calculation order feature is required when multiple tax codes must be applied for one scenario (one departure location and one destination location). With this feature, we use the example of the way Canada's Quebec calculates their taxes - QST is to be applied after the GST. Simply enter a number in the sequence of importance (1,2,3, etc.) - in the case of Quebec, GST would calculate first, and then the QST would be calculated on top of that (1 for GST and 2 for QST).
start date - Indicate when the rate becomes effective. Any transaction after this date will be using this rate.
end date - Indicate when the rate is no longer effective. Any transaction after this date will not be using this rate.
from and to country - Indicate the "ship from or to" country that will use this rate. You must enter the Google long description, e.g. United States instead of USA.
from and to state/province - Indicate the "ship from or to" state or province that will use this rate.
to and from county - Indicate the "ship from or to" county that will use this rate.
city - Indicate the "ship to" city that will use this rate.
Once you're done, click the save button located at the bottom right corner of the page.
Once your taxes have been configured, when you create a transaction that meets one of the tax conditions, the rate will automatically populate.
For instance, if you set up taxes by location, the system will know which rate to pick up based on the country, state/province, and city that is entered on the ship-to of that transaction.
You cannot change any tax scenario if it has already been used in transactions.
Recalculating taxes after they have been edited
Manually edited taxes on a transaction are indicated with a blue asterisk. This can be seen at the bottom of a transaction:
To revert back to the original taxes, click the tax value field and click the recalculate taxes button:
To cancel and exit the screen, click the cancel button.
To save your changes and apply the changes made to your taxes, click the accept button.
Import and export your tax setup
Instead of making changes or adding configuration manually, you can easily import your tax setup automatically using the import/export tool. All tax validations that exist when entering new rates manually also apply when importing them.
To access the import and export functions, click the settings button from any screen.
Import and export are found under the reports & data card.
Click on export and select tax setup from the drop-down:
Click the export button and Paragon will export your data into a spreadsheet format. All of the fields that are configured on the tax setup screen will appear as columns in your excel sheet.
If you want to add a new line to the tax setup instead of updating an existing line, leave the line number blank for that row.
After you have made your changes or added new taxes, you can import the file into Paragon.
Now that your taxes are set up, you can create transactions and have all of the taxes automatically calculated. Here are some other handy configuration articles that you may find useful: