Trackops allows you to create as many tax rates as you need, making it easy to track the amount of tax you collect.
To create a new tax rate, click the Settings tab, click the Tax Rates link, and then click the New Tax Rate button in the upper right.
From here, add each tax component that adds up to the total tax rate. Each tax rate must contain at least one component. In its simplest form, the component can simply be the entire tax rate, such as the simple example below:
Simple Example for Colorado (USA):
| Tax Component | Rate |
| Colorado Sales Tax | 7.72% |
| TOTAL: | 7.72% |
For the most detailed results, you should research all the components that make up the total tax rate, and break them down individually, as shown in the advanced example below:
Advanced Example for Denver, CO (USA):
| Tax Component | Rate |
| Colorado State Tax | 2.90% |
| Denver City Tax | 3.62% |
| RTD Tax (train) | 1.20% |
| TOTAL: | 7.72% |
In some situations, you may need to work with compound tax rates, or "effective" tax rates. These are rates that are calculated on top of all other taxes. For example, if you collect tax in Quebec (Canada), you would need to track the effective rate of QST + GST, in addition to the standard federal rate (see below):
Compound (Effective) Tax Example for Quebec (Canada):
| Tax Component | Nominal Rate | Effective Rate |
| QST | 8.50% | 8.925% |
| GST (Federal) | 5.00% | 5.00% |
| TOTAL: | 13.50% | 13.925% |
In the example above, you would mark the "GST + QST" component as "compound", which would generate the proper effective rate.
Note: If you have questions about setting up tax rates, you should contact your accountant directly. Trackops does not offer tax advice.
Configuring Tax Rate Defaults
There are several places where tax rates can be configured in the system. The rate that is selected by default when selecting an invoice item on an invoice is dependent on several checks. In order, these are the checks performed when determining the default tax rate:
- Default tax rate configured in client price list (client location first, then parent client).
- Default tax rate configured on the client or client location profile (client location first, then parent client).
- Default tax rate configured on the invoice item itself via Invoice Item Configuration.
If tax rates are not configured at the price list or client profile level, they will always fall back to the invoice item configuration.