Use this activity to define tax books. You must define at least one tax book for the tax reporting process.
By defining more than one tax book, you can separate tax transactions into sub ledgers
so that you have more control and flexibility for defining tax reports. As a simple example, you could define a Sales tax book and a Purchase tax book. Later you could print reports that include only sales transactions, only purchase transactions, or both types of transactions, simply by selecting the appropriate tax book(s).
When you define tax books, you also define whether the tax book will include all tax codes or will be restricted to only specific tax codes. Defining tax books restricted to certain tax codes enables you to create truly specialized tax books.
Note: When you define multiple tax books, keep in mind that each tax code and tax direction combination (tax code + tax direction) can be used in only one tax book. For example, if you have a tax code called VAST (Virginia State Tax), VAST can be used in only one tax book defined with a Received direction. It could be included in another tax book only if the second tax book had a Disbursed or a Disbursed/Received direction. This also means that you can have multiple tax books with a Received direction only if each is restricted to specific tax codes. (You cannot define one tax book restricted to some tax codes in a Received direction and then define another tax book that uses all tax codes in a Received direction.) The
minimum requirement is to define one tax book is, where Tax
Code = All and Tax Direction = DisbursedReceived.
If a tax series is to be connected to a tax ledger, it is mandatory to first define the tax series in Tax Series.
Different types of tax transactions will be separated into different tax sub ledgers (tax books).
Note : If you set the Tax Code field to Restricted, you must specify the tax codes to use with the tax book before you can close the window. (Right-click and then click Tax Codes per Tax Book to open the window in which to specify the tax codes.)