On 03/28/2018 07:50 AM, Mike or Penny Novack wrote:
On 3/27/2018 6:28 PM, Matthew Pressly wrote:
Our state tax laws are such that most of the work that I do is
considered "data processing" of which 20% is exempt and 80% is
taxable. Is there a good way to configure GnuCash to handle that when
making an invoice?
It's worse than this (the general case) and we may be asking too much
of an accounting package (as opposed to a "point of sales" system that
feeds the accounting package). A state might have complex rules about
what is taxable and at what rates.
We'll start with to your example. Suppose your services to some client
included some sort of work taxed at 100%, some data processing at that
80/20 rate, and some sort of work not taxed at all. Obviously whatever
rule could not be based on the invoice total but would have to be
based on the parts of the bill. And could you reasonably expect the
accounting package to "know" the categories? What if that were
complicated.
I think the approach suggested by Derek will do what I need, basically
adding to the tax table a tax rate that is 80% of the actual sales tax
rate. Then when creating the invoice, I indicate for each line item
whether or not it is taxable, so tax is computed per line item, as
applicable, instead of basing it on the totals. If a line item is
taxable at the 80% rate, I assign it into one "sub"-account, and if it's
not taxable, I assign it into a different subaccount. This way, with
some additional arithmetic, I can total taxable sales and non-taxable
sales separately for tax reporting.
In the more general case that you describe below, it might be necessary
to have multiple entries in the tax table, then choose a different tax
table entry as needed for different line items (sorry, my terminology is
not very exact on this).
Take a store selling (among other things) clothing in my state. In
general "clothing" not taxed BUT individual items of clothing above a
certain price taxed and perhaps clothing "accessories" taxed (or other
items people might think of as in the category "clothing"). Ordinarily
it is a "point of sales" system that accesses a database of what it
taxable and produces the receipt/bill with the amount that is tax
figured out (and then THAT passed to the accounting package -- and
probably the inventory package).
When we fault gnucash for not doing some of the things available with
this or that commercially available "business system" we forget that
those business systems come with parts doing those things. They are
built up of cooperating pieces only one of which is "accounting". In
many cases not monolithic systems as different sorts of entities would
need only certain parts. Thus a "store" would want POS and inventory,
a professional service not need those but would want billable hours,
and both would want payroll.
Hopefully I didn't sound like I was faulting GnuCash in any way -- that
was definitely not my intent. I've been using GnuCash for about a year
and have found it a very capable. I am mainly trying to streamline
invoicing. The accounting I do is for my web development business, which
is a small, part-time operation, so I'm trying to keep things as simple
and as inexpensive as possible.
Thank you for your input.
--
Matthew
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