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  4. How to set up taxes by location*
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  3. How to set up taxes by location*

How to set up taxes by location*

In Paragon, taxes can be configured to automatically apply to transactions, products, and companies. This document will show you how to set up these taxes by location only.

Step 1: Go to settings

From any screen, hit the settings button in the top right corner.

Step 2: Enter tax setup

The tax setup screen can be accessed under the financials card on the settings screen.

Step 3: Add new tax

Enable editing by hitting the edit button in the top right corner: 15-edit

Add a new line with the add button in the top left corner.

Fill in each column. Every line represents a unique tax to be applied.

For example, the lines shown below define that specific taxes should be charged when any product is shipped to the Canadian provinces of Alberta and New Brunswick (regardless of the departure location of the shipments).

tax setup 2

You can also add in a specific county as a location if you are doing business in the United States.

For example, we’ve added the sales tax for Arkansas, for both state and county. The state tax is setup to be at 6.5%, and the country tax for Baxter County, Arkansas is setup for 1%.

Select a tax code

The tax code field must be created / modified through attribute setup.

tax setup 4

In attribute setup, the tax code field is listed under the attribute tax.

tax setup 5

Choose the compound option

If you sell to a region that has multiple taxes calculated on top of each other, you must specify if the tax scenario you are creating needs to be compounded (or added to the previously calculated tax value on a specific transaction) or not.  The Canadian province of Quebec is a perfect example of this.  The QST tax is calculated on the selling price plus the GST tax – that would mean that the QST tax in Paragon would be flagged as compounded.  In the example below, the checkbox for compound in the tax setup screen would have to be checked for any products shipping to Quebec:

Select a type

The type field indicates whether a tax line applies to a item, company, or location.

When type is set to item, then the tax can be applied to a product in the product setup.

When type is set to customer, then the tax can be applied to a customer in the customer setup.

When the type is set to location, then the tax is automatically applied to transactions originating in the ship from location and/or with a destination as the ship to location.

Select the calculation order

The calculation order feature is required when multiple tax codes must be applied for one scenario (one departure location and one destination location).  With this feature, we use the example of the way Canada’s Quebec calculates their taxes – QST is to be applied after the GST.  Simply enter a number in sequence of importance (1,2,3, etc.) – in the case of Quebec, GST would calculate first and then the QST would be calculated on top of that (1 for GST and 2 for QST).

Enter start and end dates

Each tax setup line must be created with a valid date range.  In other words, when can I start using this tax scenario and when must I stop using it?  Any transaction being created outside of those dates will not use those tax settings.

Enter departure and destination countries, provinces/states and cities

This feature allows you to determine which tax code should be used based on the shipping addresses on your transactions.  The country fields are drop-down lists of all possible countries in the world.  If using addresses in Canada or the United States you will get a drop-down list for the associated provinces or states.

Step 4: Save

Once all required taxes have been added, hit the save button.

tax setup 6

You cannot change any tax scenario if it has already been used in transactions.

Example of a transaction with taxes automatically calculated based on from and to addresses:

What’s next?

Now that your taxes are set up by locations, you can create transactions and have all of the taxes automatically calculated. If you want to learn more about setting up locations to apply your taxes, check out our Jonar documentation on how to create new locations.

Updated on September 20, 2019

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