Before processing sales in Artisan, make sure you have set up your tax settings. Most of our customers will use the basic tax setting, Local Tax, and don’t require more advanced configurations. We’ll also include a brief overview of non-taxable items in this section with a more advanced overview later. If the basic settings apply to you, please read the following steps.
If you require advanced tax settings, such as tax exemptions, please click here to jump to that section of the article. If you would like to see the sort of sales tax reports you can run, please click here to move to that section.
Configuring Local Tax Settings
Head to “Business and Finanical Settings” under the “Program Options” screen.
Click on “Sales Tax Settings.”
Click on “Sales Tax Rates.”
This screen shows any Sales Tax Rates you have.
Local Tax Rate – This tax rate is a combined rate, usually combining city, county, and state as one rate. Set up this rate here by clicking on “Edit” and entering the amount. Press “Save.”
No Tax – This tax rate will not apply a tax to an item. You can configure if an item is taxed or not in the item’s category.
All subcategories that are within the apparel category (for example, T-Shirts) will have this “NT” setting automatically applied to them.
Default Tax – This setting applies to using a default tax rate for sales and orders, not products. If you want to set up a Default Tax for your sales and orders, follow these steps.
Click on the “Sales and Order Defaults” section in “Program Options.” Most of our customers will leave “Local” as their Default Sales Tax Type.
If you require advanced settings, please read the “Non-Taxable Items and Sales Tax Exemptions” section.
Local Tax Rate – Sales Screen
In this example, a customer is purchasing a single can of soda. The default tax rate, Local, was applied to their order.
No Tax – Sales Screen
In this example, a customer is buying a T-Shirt. Since it’s apparel, we classified it as “Non-Taxable” in its category, so it automatically won’t be taxed.
If you need to change an item’s tax rate on the sale’s screen, you may do so by selecting the pull-down and clicking on a different option. We advise using extreme caution when doing this and only changing an item’s tax rate if you are sure you are allowed to do so. For example, since t-shirts aren’t taxable, we wouldn’t want to change the tax rate to a taxable option, like “Local Tax.”
But if the customer bought something that should to be non-taxable for whatever reason, we can do so. In this example, we’re changing this “BC Bottle Rocket” from “Local Tax” to “NT.”
What would be a reason behind this? Let’s find out in the next section.
Non Taxable Items and Sales Tax Exemptions
Depending on what you sell and who your customers are, you might run into situations that require not using your local tax rate. You might need to create a tax exemption or edit the category’s tax settings.
Tax Exemption
A common example is a feed store that supplies farmers. If the farmer is buying something for his farm, the item legally shouldn’t be taxed. So, how would we go about configuring this in Artisan?
We’ll head to “Sales Tax Settings” in our “Program Options” and click on “Tax Exemption Types.”
Click “Add” and type in the Tax Exemption name. You can also adjust the order of this exemption if you want it to show at the top of the list.
Let’s head to the customer’s record.
Under “Sales Tax Type” we’ll set it to “No Tax.”
We’ll select the “Exemption Type.”
A “Tax Number” is required after selecting the “Exemption Type.” This is usually a number on a tax certificate. Contact your accountant or state revenue department for more information.
Tax Exemption – Sales Screen
When selecting a customer that already has a Tax Exemption set, it’ll show on the Sale’s Screen.
Any item this customer purchases will automatically be exluded from Sale’s Tax, even if the item is normally taxable.
If you need to change this, just select the dropdown and select “Local.” This item is now taxable.
In this example, this customer is buying two more items, but for his farm. The category for the first item (the Seed Packet) is already set to Non-Taxable, so it’ll auomatically show up as non-taxable on the sale’s screen. The second item (Wheelbarrow) is normally taxable. Since the customer has a Tax Exemption Type, the item is automatically set to be non-taxable.
Other Reasons for Tax Exemptions
There are other scenarios why you might use a tax exemption, such as tax holidays or shipping an item out of state.
Switch the “Tax” to “NT.” Artisan will require you to select the “Tax Exemption Type.”
Reports
To get a better look at which items you sold weren’t taxable, and which customers didn’t pay sales tax, you can run various reports.
Daily Sales Tax Breakdown
Under “Reports,” click on “Sales Reports” and “Daily Sales Tax Breakdown Report.” Enter a date range. For our example, we’ll just set the date to today.
Sales Summary Report
Under “Reports,” click on “Sales Reports,” and “Sales Summary Report.” Make sure “Show Sales Tax Breakdown” is set to “Yes.”
The first two pages include some details about taxes, with the second page giving more detailed information.
First page:
Second page:
Sales Tax Exemption Detail Report
Go to “Reports,” “Accounting Reports and Statements,” and “Sales Tax Exemption Detail Report.”
Set a date range. For our example, we’ll use today. If you want to show normal taxable sales and non-taxable sales, select “Yes.”
This report shows a breakdown of the customers who were and were not tax exempt.
This report is especially helpful in the event of a tax audit.