Creating Tax Codes

A tax code is a grouping of tax authorities. Tax codes are assigned to customers, and tell e-automate how to charge any taxes owed on transactions with that customer. Before you can assign a tax code to a customer, you must assign tax authorities to that tax code.

For example, if your business is based in Los Angeles County, California, and you are selling widgets to customers who live in that same county, you will need to charge state sales tax on those widgets as well as county tax. To do that automatically for every transaction with every customer in that county, you would simply need to create one tax authority for the state of California and one tax authority for Los Angeles County.  You would then create a tax code that combines the two tax authorities and assign it to those customers.

 

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