Taxes can be tricky. Within RW Elephant, we want to help you keep things clear and simple when it comes to collecting Sales Tax.
Let’s help you find which tax setup is right for you in your rental biz.
From the three scenarios below, which sounds the most like your business situation?
Scenario 1: You only ever charge one Sales Tax Rate (or no tax ever).
Check out Primary Sales Tax.
Scenario 2: You’re required to charge two different tax rates on a single Invoice (i.e. GST + PST)
Check out Primary + Secondary Sales Tax.
Scenario 3: You charge a single sales tax rate on each Order but the rate varies based on the county or city you service.
Check out Variable Sales Tax Items.
Primary Sales Tax
If you only ever use one Sales Tax Rate, you’ll simply enter the rate within your Payment Settings under “Primary Sales Tax Rate (%).”
When you tick the “Apply primary sales tax” box on an Item, this rate will be applied.
For our friends that are lucky enough to never have to collect Sales Tax, we recommend that you enter “0” as your Primary Sales Tax Rate and keep “Apply primary sales tax” ticked for most of your Items. That will allow you to avoid having the “NOT TAXED” note show up for every single item on your Order PDFs.
Primary + Secondary Sales Tax
CONFIGURE TAX RATES
If you need to collect two taxes simultaneously on one Invoice, you’ll enter the two rates under Primary & Secondary Sales Tax within Payment Settings.
We’d recommend that your Primary Sales Tax Rate be the rate that is applied to all (or almost all) of your Items. Then enter the second rate under Secondary Sales Tax Rate.
CONFIGURE ITEM TAX SETTINGS
If certain Items only ever get one or neither of the tax rates, you can configure the tax settings for each individual Item within the Items section of RW.
When you first create an Item, you’ll be able to choose “Apply primary sales tax” and “Apply secondary sales tax.”
This can also be updated for existing Items by heading to the Item Settings gear icon to the right of the Item Name field.
This will open the “Edit Item Settings” pop-up.
NAME TAX RATES
If you’d like to specify the names of these Tax Rates (i.e. VAT, PST, GST, etc.), head to Invoice Settings.
Select the “Template Labels” tab and click the green “Edit” button.
Enter the names of the Tax Rates under “Sales Tax” and “Secondary Sales Tax.”
Click the green “Save” button.
This will update your Invoice PDFs with the correct verbiage so you and your customers know exactly what you’re collecting. Keep in mind that the “Secondary Sales Tax” label will only display on your Invoice once a name is entered in the “Secondary Sales Tax” field.
If your Invoice PDF does not update right away, be sure to refresh existing Orders by clicking the green “Edit Order” and then “Save Order” buttons before generating the Invoice PDF.
Variable Sales Tax Items
If you are required to collect taxes at different rates based on the area, county, city, etc. that you service, you’ll want to create individual Variable Sales Tax Items for each region.
For example, if you have to charge 6.5% in Coolsville County but 8.2% in Richman County, then you’ll create a Tax Item for each of those counties.
We recommend entering your default sales tax rate (or the rate you collect on the majority of your Orders) as your Primary Sales Tax Rate within Payment Settings.
Then additional Tax Items can be added on an Order-by-Order basis and will override your default Sales Tax Rate.
Check out the Tax Items support page for a walk-through on how to create these types of Items.
Still not sure how to set things up in your RW Account? Shoot us an email at help@rwelephant.com and our Client Success Team would love to help you get squared away.