Create the Perfect Sale Tax Invoice Format for Research and Development

Sale tax invoice format for Research and Development

hi there Dave here from invoice ninja today I'd like to take you through our latest feature which is automatic Us sales tax calculations calculating sales tax can be incredibly difficult as the rules are always changing with this new feature we've made it super simple to get started collecting the correct sales tax in the states you're selling into we've updated our documentation on our sites to include all the steps here to get configured but for now we're going to take you through an interactive demo how to get started in collecting sales tax first thing we want to do is turn it on so let's head into settings and text settings and then new row here for calculate taxes this expands out we have few additional options so if you're based in the US you'll want to select state you're selling from this is important because some states have what's called origin based sales tax meaning that you charge the sales tax based on your location rather than your client's location so for this example we're going to select Florida and now we want to select the states that where we want to collect sales tax from so if you only need to collect sales tax from one or two states you can go through and manually select them here so for example we can just select Florida there and with this configured you're only going to charge taxes on clients that are based in Florida as well for this example though we're going to select tax all which will apply taxes to all the states in the US one final thing as these taxes are calculated calculated at the item level you want to ensure that the inverse invoice item tax rates are enabled and then click save so let's give you some examples here of how the tax calculations can look different for clients in different regions for example someone based in Kansas let's go through and let's create for them an invoice we're going to sell a physical product and we're going to add some shipping to this as well in Kansas you're required to calculate the taxes both on the physical product and the shipping as well you can see here the system has gone through found the correct rate based on this client's location and apply taxes to both line items what about somebody based in California let's create the same invoice for them Fournier sales tax isn't charged on the freight you can see here the correct sales tax is calculated for this client's exact location but no taxes applied to the frame it's that simple but things can get complicated depending on what you're selling can determine whether sales tax is applied for example for some services you don't charge sales tax form and so configuring your product catalog is super important so that the correct tax is applied so when you're creating a product and this product could be for example say servicing a car you want to apply the services tax category to this because in the state you're selling this into or collecting is from there may not be any any sales tax on services so it's very important that you know your product types and whether or not uh sales tax is going to apply to them and click save we support digital products physical products also tax exempt products there's a whole bunch of special tax categories where taxes may not apply and for those ones you can mark the category as tax exempt and for those products no sales tax will be applied we also have an override tax category and what's this well if it's a special kind of product where you know the exact tax rate that has to be applied you can manually apply the tax rate to it so for example here for this override product we're going to charge this random tax called a GST tax let's go through and create an invoice somebody in California with this overwrite tax you can see here you have a right tax will it be applied when you select your regular product sales tax is applied you can see we break out the different taxes here as well which itemizes the taxes certain clients can be tax exempt for those clients you may need to have exemption certificates you can store them on the client record themselves but more importantly you can actually Mark clients as tax exempt for these clients now for all invoices that are created for them no taxes will be applied to their invoices if you're charging across borders so say you need to start collecting taxes on your clients in Australia you can enable that from here so we've just added Australia in now so now when we're selling our same physical product into Australia with some shipping the Australian GST is going to be collected foreign tax collected data for reporting later on so when you need to generate reports and report this back to the tax authorities all this breakdown will be included so that making your reporting back to the tax Authority is super simple so you can see getting started with collecting taxes very simple configuring the products is very important but you always have the option to override those as well if you have any questions leave them in the comments below thank you for watching