Admin Tools: Sales Tax

The Sales Tax option in the System category of Admin Tools is used to set up a state’s sales tax for services provided by a staffing company. Currently, not all states require sales tax on services rendered. If employees are placed at work site addresses in states where sales tax is required, sales tax should be configured for each state as described below.

For each of the setup sections below, navigate to Start Page > Actions Menu > Admin Tools > Category = System > Sales Tax to display the System | Config Sales Tax window.

Note: The first tab, Sales Tax, must be configured before the other tabs’ information will go into effect.

State sales tax configurations may already be defined on the default Sales Tax tab. Review the setup for each state and adjust as necessary.

Note: New Calc Method (04/28/2023) for Alaska (AK) calculates only on the first $500 without exceeding $35 “per sale” [Per Sale = Per Authority / Per Invoice]. This option does not support dual sales tax. An option is to combine if multiple authorities are required.

• Flag Requires sales tax for supplier: Admin Tools > Employer > Locality/Country
• Configure Sales Tax to the Customer / Order — the worksite address determines the state of the sales tax: Customer > Edit Customer [detail] > See All [by Address Type] > Sales Tax — Only AK configured sales taxes should show.

Troubleshooting tip: If an invoice is missing sales tax you expect to see, these two settings are the first things to check, in order. First, confirm the Requires sales tax for supplier flag above is set for that state — if it isn’t, that state’s sales tax configuration won’t even be selectable on the supplier’s customer addresses, no matter how the state-level configuration itself is set up. Then confirm the order’s worksite address is assigned to the customer address record that has a Sales Tax value selected — sales tax is driven entirely by the worksite address, not the billing address, so a worksite address with no Sales Tax value selected will bill with no tax.

Sales Tax Tab

Note: The first tab, Sales Tax, must be configured before the other tabs’ information will go into effect.

1. Click Add New in the Sales Tax tab. The Config Sales Tax and Sales Tax Rate group boxes are cleared to show blanks and default values.

   

2. Complete the Config Sales Tax fields according to these definitions.

   Field	Description
   Name	A name that describes the tax rate. This name will appear when a tax rate is assigned to a customer’s work site address in the Customer section.
   Description	Additional information to describe the new sales tax configuration.
   State	The state to which this configuration will apply.
   CalcMethod	Select one of the following calculation methods: dbo.bil_ProcessSalesTax_Default — Use for exempt rates and straight percentage sales tax (total sales x tax rate). Currently used by Connecticut and Washington. dbo.bil_ProcessSalesTax_PA — Use if sales tax is calculated on gross profit (gross profit x tax rate). Applies to Pennsylvania only. dbo.bil_ProcessSalesTax_SkillCode — Use if the state requires sales tax on only particular skill codes. If selected, complete the setup described in Indicating skill codes that require sales tax. dbo.bil_ProcessSalesTax_State — Use if sales tax is calculated on a state rate plus county-specific rates (total sales x state rate + total sales x county rate). Applies to Ohio only. dbo.bil_processSalesTax_AK — Use for cities and boroughs in Alaska that charge sales tax, some of which have a taxable amount limit. dbo.bil_ProcessSalesTax_GrossMargin — Calculates tax on the difference between the bill amount and employees’ wages (net sales minus cost of goods sold). Applies to Puerto Rico only. dbo.bil_ProcessSalesTax_GPInvoice — Use if sales tax is calculated on gross profit (gross profit x tax rate) for states other than Pennsylvania. Use dbo.bil_ProcessSalesTax_PA for PA. dbo.bil_ProcessSalesTax_StateCity — Use if sales tax is calculated using a city/county/state rate hierarchy. Checks for a city-level rate first, falls back to county if no city rate exists, then falls back to state if no county rate exists. Introduced for Washington state city-specific tax rates. dbo.bil_ProcessSalesTax_StateCity_All — Use if sales tax must combine state, county, and city rates into a single rate when all three match the worksite address. Unlike dbo.bil_ProcessSalesTax_StateCity, which applies only one matching tax layer, this method sums every matching layer into one combined rate. Used for multi-tier jurisdictions like New Mexico.
   Select Show Zero Bill By Default	Allows an invoice to display items even if they have a zero bill amount.
   Automatically Apply Sales Tax to Customer	Ensures uniform sales tax application across all customers in the same state or province. If selected, this sales tax will be added to new customers created with this state.

Sales Tax Rate

The state’s sales tax rate is entered into the Rate (%) column.

Note: If the configuration is being set up for a state that uses an individual state rate, the rate must be set up on the Sales Tax State Rate tab. Any rate entered here will be ignored.

Start Date – The date on which the tax rate will apply. By default, the Start Date is the first day of the current year. In 2024, the Start Date will default to 1/1/2024.

End Date – The date on which the tax rate will no longer apply. By default, the End Date is set to the last day of the year twenty years into the future. In 2024, the End Date will default to 12/31/2043.

Note: Changing a rate here (or on the Sales Tax State Rate or Sales Tax City Rate tabs) only affects invoices generated after the new rate’s Start Date — it doesn’t retroactively recalculate invoices already generated at the old rate. To correct tax on an existing, unposted invoice, locate it under Invoice > Search, open it, and use the invoice’s tax line correction tools to reapply the current rate. If the invoice has already been posted, it needs to go through the standard Remove Invoice Correction process first before the tax line can be recalculated.

3. Click Save. Repeat these steps to complete the sales tax setup for additional states.

Deleting a Sales Tax Rate

When deleting a Sales Tax Rate, a confirmation notification appears to ensure you want to proceed.

If a Sales Tax Rate is associated with processed transactions, a notification will appear and the deletion will not be permitted.

Tax-Exempt Customers

A 0% tax rate can be created and applied to tax-exempt customers.

1. Click Add New in the Sales Tax tab.
2. Complete the Config Sales Tax fields, including the word “EXEMPT” in the Name so the rate is easily identified, and use dbo.bil_ProcessSalesTax_Default as the CalcMethod. Enter “0” for the Sales Tax Rate.
3. Click Save. Repeat these steps to complete the sales tax setup for additional states.

Sales Tax Transaction Types Tab

The Sales Tax Transaction Type tab identifies transaction types that are subject to state sales taxes, as well as which are “pass-through” (deductible) types. This setup must be completed for all sales tax configurations.

1. Click the Sales Tax Transaction Type tab.
2. Select a state sales tax configuration from the list of existing configurations.
3. Select a transaction type from the Sales Tax Transaction Type group box.
4. In the Is Deduction column, check the corresponding checkbox if the type is a deduction.
5. In the Select column, check the corresponding checkbox if the type is to be included in the sales tax calculation.
6. Click Save when finished. Repeat the steps for additional transaction types.

Tip: This is also how to exclude a specific charge type — gratuities or other pass-through charges, for example — from sales tax entirely: select the sales tax configuration, select that transaction type, and leave its Select checkbox unchecked. Only checked transaction types are included in the tax calculation. Use the Is Deduction checkbox separately to mark a transaction type as a pass-through/deductible amount rather than a taxable charge.

Sales Tax Skill Code Tab

In some states, particular skills may be subject to sales tax. If the state requires taxes for particular skills, complete this tab. The state must be set up with a processing method of dbo.bil_ProcessSalesTax_SkillCode.

1. Click the Sales Tax Skill Code tab.
2. Select the sales tax in the list to work with.
3. In the Sales Tax Skill Code area, place a checkmark in any Select column checkbox corresponding to taxable skills.
4. Click Save when finished.

Next Step: Associate this sales tax with the Customer in Customer > Address Sales Tax. During the Billing process, any orders and assignments from this customer with a Skill Code or Job Title designated in Admin Tools Setup will generate tax.

Sales Tax State Rate Tab

For states that have a state-level sales tax rate, use the Sales Tax State Rate tab to configure state and county rates.

1. Click the Sales Tax State Rate tab.
2. In the Config Sales Tax Rate State group box, modify the rate as needed.
3. In the Sales Tax Rate State County group box, review and update the county rates as necessary.
4. Click Save.

Sales Tax City Rate Tab

The Sales Tax City Rate tab allows you to configure city-specific sales tax rates for states where city-level tax obligations apply.

1. Click the Sales Tax City Rate tab.
2. Click Add New to create a city-specific tax record.
3. Complete the fields: State, City, Tax Rate, Start Date, End Date.
4. Click Save when finished. Repeat these steps for additional cities.

Note: In multi-tier jurisdictions such as New Mexico, the dbo.bil_ProcessSalesTax_StateCity_All method combines the state, county, and city tax rates into a single combined rate when all three match the worksite address.