Setting up Profit-based / Use Tax

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Profit-based / Use Tax is a specific system of taxation utilized by particular regions throughout the United States. This tax is calculated from the gross profit of an invoice rather than the total. Below is a quick explanation of how to setup Profit-based / Use Tax in FieldEdge.

Note: Standard tax groups in QuickBooks do not accommodate this. When working with Profit-base / Use Tax you will be unable to use the pay tax option in QuickBooks. You will have to reference the actual accounts in QuickBooks instead.

1. To get started, go to Settings and click on Tax Groups under the Company section.

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2. The Tax Group list provides a full list of Tax Groups represented by Name, Description, Tax Type, and Include Labor Cost.

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3. To change the Tax Type of a Tax Group, click on the check box associated with the Tax Group(s) you wish to modify and select the Edit button.

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4. On the Edit Tax Groups screen, select the Tax Type - Profit-based / Use Tax. This will reveal Additional Settings. 

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5. When Use Tax is selected, labor cost is excluded in your invoice profit calculation. To disable cost from being excluded from your profit, you can select Include labor cost in Use Tax calculation.

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6. Lastly, select a Tax Exempt Group. This will be the referenced line item that appears on the invoice, over in QuickBooks, to represent the Use Tax.

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7. When finished, click Save.

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