#1  
Old 24th June 2006, 10:20 PM
Chris
 
Posts: n/a
Default Tax in international invoice system

Hi

I've written an invoicing system that I sell in the UK. I'm looking at
what's involved in making it work in (say) the USA and Australia but I'm not
too sure how TAX works in these countries and I'm looking for pointers.

For example: here in the UK we have VAT. If a business is VAT registered it
must charge VAT on any items that are subject to VAT, so in a given invoice
there could be three full VAT items, 2 half VAT items and 1 no-Vat item.

From what I can see the Australian system works in a similar way but instead
of VAT it is called GST?

In the USA it seems that there are state and federal taxes, and I have no
idea how these work. As best as I can see the federal tax (if charged) is
based on the total of the invoice (before any state taxes are added)
regardless of what items make up the invoice, is this correct? I cannot
decide whether all items are subject to state tax or not.

As you can see, I'm not really making any headway so I would be grateful if
anyone wanted to share their knowledge.

Many thanks

Chris F


  #2  
Old 24th June 2006, 11:23 PM
Brian Evans [NDX]
 
Posts: n/a
Default Re: Tax in international invoice system

Chris wrote:
> Hi
>
> I've written an invoicing system that I sell in the UK. I'm looking at
> what's involved in making it work in (say) the USA and Australia but I'm not
> too sure how TAX works in these countries and I'm looking for pointers.
>
> For example: here in the UK we have VAT. If a business is VAT registered it
> must charge VAT on any items that are subject to VAT, so in a given invoice
> there could be three full VAT items, 2 half VAT items and 1 no-Vat item.
>
> From what I can see the Australian system works in a similar way but instead
> of VAT it is called GST?
>
> In the USA it seems that there are state and federal taxes, and I have no
> idea how these work. As best as I can see the federal tax (if charged) is
> based on the total of the invoice (before any state taxes are added)
> regardless of what items make up the invoice, is this correct? I cannot
> decide whether all items are subject to state tax or not.
>
> As you can see, I'm not really making any headway so I would be grateful if
> anyone wanted to share their knowledge.
>
> Many thanks
>
> Chris F


The US has State and Local sales taxes, no national one yet.
Canada has Provincial and Federal. (hint!)

Good site on the US system, http://www.taxadmin.org
Check http://www.taxadmin.org/fta/rate/sl_sales.html
They tend to be horribly special cased and change all
the time however. For example:
http://www.mstc.state.ms.us/taxareas...ates.htm#PART3

Brian Evans [NDX]
  #3  
Old 25th June 2006, 12:43 AM
Robert Meek
 
Posts: n/a
Default Re: Tax in international invoice system

It's gotten so complicated that even long-time CPA's are having
problems, and when you get into corporate structures it gets even worse! I
would not suggest trying to figure it out by reading the laws or any public
documentation. Instead take a look at a system similar to yours and that'll
give you a pretty good start. then go over it with a business accountant.
Also, in case you didn't know our States here make us charge sales tax on
certain items and each state sets their own percentage. And not only is the
sales tax charged dependant upon what the item being sold or re-sold is, but
also where it's bought, where it's sold, and even how its sold, such as via
person to person or mail!

--
from Robert Meek dba Tangentals Design
meekTAN@comcast.net
"Chris" <nospam@nospam.com> wrote in message news:449d20e0@wic040d....
> Hi
>
> I've written an invoicing system that I sell in the UK. I'm looking at
> what's involved in making it work in (say) the USA and Australia but I'm
> not too sure how TAX works in these countries and I'm looking for
> pointers.
>
> For example: here in the UK we have VAT. If a business is VAT registered
> it must charge VAT on any items that are subject to VAT, so in a given
> invoice there could be three full VAT items, 2 half VAT items and 1 no-Vat
> item.
>
> From what I can see the Australian system works in a similar way but
> instead of VAT it is called GST?
>
> In the USA it seems that there are state and federal taxes, and I have no
> idea how these work. As best as I can see the federal tax (if charged) is
> based on the total of the invoice (before any state taxes are added)
> regardless of what items make up the invoice, is this correct? I cannot
> decide whether all items are subject to state tax or not.
>
> As you can see, I'm not really making any headway so I would be grateful
> if anyone wanted to share their knowledge.
>
> Many thanks
>
> Chris F
>



  #4  
Old 25th June 2006, 04:23 AM
Chris
 
Posts: n/a
Default Re: Tax in international invoice system


"Robert Meek" <meekTAN@comcast.net> wrote in message
news:449d427a$1@wic040d....
> It's gotten so complicated that even long-time CPA's are having
> problems, and when you get into corporate structures it gets even worse!
> I would not suggest trying to figure it out by reading the laws or any
> public documentation. Instead take a look at a system similar to yours
> and that'll give you a pretty good start. then go over it with a
> business accountant. Also, in case you didn't know our States here make us
> charge sales tax on certain items and each state sets their own
> percentage. And not only is the sales tax charged dependant upon what the
> item being sold or re-sold is, but also where it's bought, where it's
> sold, and even how its sold, such as via person to person or mail!
>
> --


Thanks for the suggestion.

I've looked at a few invoice systems that are tailored for the States now
and they all seem to just add the separate taxes (i.e. state, county, city)
on to the sub total of the invoice, this means that all items are subjected
to tax. Is this correct, surely some things must be tax free (necessities
like food etc)?

Of course if this is correct it certainly makes life easier for me.

Thanks

Chris F

PS. Actually, I just re-read your post and it seems that you have already
answered this in that you said that you have to charge sales tax on certain
items, which I guess means that some items don't attract sales tax, does
this mean that I've just looked at some bad examples of invoicing systems?

I hate to go on but how would the following sound in principal:

My current system just holds the applicable tax percentage for each item
sold, then when the invoice is saved the tax element for each item is
calculated and added to the sub total of the invoice, it occurs to me that
by adding two further fields to each item I could then hold further
percentages to account for all three of the possible taxes (argh, is it four
taxes with Sales tax?!?!?!)? I'd appreciate your thoughts

Thanks again

Chris


  #5  
Old 25th June 2006, 05:17 AM
David Marcus [NDX]
 
Posts: n/a
Default Re: Tax in international invoice system

Chris wrote:
> I've looked at a few invoice systems that are tailored for the States now
> and they all seem to just add the separate taxes (i.e. state, county, city)
> on to the sub total of the invoice, this means that all items are subjected
> to tax. Is this correct, surely some things must be tax free (necessities
> like food etc)?


Generally in the U.S., there is a sales tax that varies by location.
Even if more than one level of government is doing the taxing, the
receipt will just have one entry for sales tax. The Federal government
does not have a sales tax. Most states do. Some cities do. Typically,
not all items are subject to the tax. Usually, all items that are taxed
are taxed at the same rate, but I don't know if this is always true.

For mail order businesses, the tax is based on the location the item is
shipped to. However, businesses without a presence in a state can't be
forced to collect sales tax for that state, and so don't.

--
David Marcus [NexusDB Expert]
  #6  
Old 25th June 2006, 06:59 AM
Q Correll
 
Posts: n/a
Default Re: Tax in international invoice system

Chris,

| this means that all items are subjected to tax. Is this correct, surely
some things must be tax free (necessities like food etc)?

No. Some items are taxable, some are not. POS systems here use a
classification code for Taxable or non-Taxable and the rates for Taxable
items. And there can be different tax rates depending on the type of
product. Tax rates also vary by State and County and City within a State!
We used to have a Federal "Luxury Tax," but it was repealed (at least for cars) on Dec. 31, 2002. However, it could be revived for certain items (e.g. cars, airplanes, boats, etc.,) at some time in the future.

There are also levies for some items, such as hard and soft drink bottles
and cans in many states. Usually called ...Return Value.

--
Q

06/24/2006 12:49:37

XanaNews Version 1.17.5.7 [Q's salutation mod]
  #7  
Old 25th June 2006, 11:08 AM
David Marcus [NDX]
 
Posts: n/a
Default Re: Tax in international invoice system

Q Correll wrote:
> There are also levies for some items, such as hard and soft drink bottles
> and cans in many states. Usually called ...Return Value.


Or "Deposit".

--
David Marcus [NexusDB Expert]
  #8  
Old 25th June 2006, 01:50 PM
Q Correll
 
Posts: n/a
Default Re: Tax in international invoice system

David,

| Or "Deposit".

Yep.

--
Q

06/24/2006 19:49:44

XanaNews Version 1.17.5.7 [Q's salutation mod]
  #9  
Old 25th June 2006, 03:50 PM
Robert Meek
 
Posts: n/a
Default Re: Tax in international invoice system

Yes, not all saleable items are taxable by the state...under "sales tax"
that is...and though most states may indeed be the same as far as these
schedules go, there may be some differences here and there! There are also
exemptions statuses, etc., so it's probably best to allow an open sales tax
item where the user can put in his own her own percentages and decide for
themselves what is or is not taxable.

--
from Robert Meek dba Tangentals Design
meekTAN@comcast.net
"Chris" <nospam@nospam.com> wrote in message news:449d7600@wic040d....
>
> "Robert Meek" <meekTAN@comcast.net> wrote in message
> news:449d427a$1@wic040d....
>> It's gotten so complicated that even long-time CPA's are having
>> problems, and when you get into corporate structures it gets even worse!
>> I would not suggest trying to figure it out by reading the laws or any
>> public documentation. Instead take a look at a system similar to yours
>> and that'll give you a pretty good start. then go over it with a
>> business accountant. Also, in case you didn't know our States here make
>> us charge sales tax on certain items and each state sets their own
>> percentage. And not only is the sales tax charged dependant upon what
>> the item being sold or re-sold is, but also where it's bought, where it's
>> sold, and even how its sold, such as via person to person or mail!
>>
>> --

>
> Thanks for the suggestion.
>
> I've looked at a few invoice systems that are tailored for the States now
> and they all seem to just add the separate taxes (i.e. state, county,
> city) on to the sub total of the invoice, this means that all items are
> subjected to tax. Is this correct, surely some things must be tax free
> (necessities like food etc)?
>
> Of course if this is correct it certainly makes life easier for me.
>
> Thanks
>
> Chris F
>
> PS. Actually, I just re-read your post and it seems that you have already
> answered this in that you said that you have to charge sales tax on
> certain items, which I guess means that some items don't attract sales
> tax, does this mean that I've just looked at some bad examples of
> invoicing systems?
>
> I hate to go on but how would the following sound in principal:
>
> My current system just holds the applicable tax percentage for each item
> sold, then when the invoice is saved the tax element for each item is
> calculated and added to the sub total of the invoice, it occurs to me that
> by adding two further fields to each item I could then hold further
> percentages to account for all three of the possible taxes (argh, is it
> four taxes with Sales tax?!?!?!)? I'd appreciate your thoughts
>
> Thanks again
>
> Chris
>



  #10  
Old 27th June 2006, 11:54 AM
Jerry Hayes
 
Posts: n/a
Default Re: Tax in international invoice system

Here in Florida, U.S. a new common politcal item is "tax free days".

The week before school, certain clothing items are tax free. The week
before hurricane season certain generators, batteries, etc.

Sheesh.




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