1. Comp Tax
Presenter : Kara Moore

2. In this session we will cover…
What is comp tax?
How to setup and maintain your system
An example of applying comp tax to AP invoices
How to run comp tax reports
How to generate invoices to pay comp tax
An example of using AP invoices to make adjustments

3. What is comp tax? Use tax - compensating for sales tax
Incurred when goods are purchased
If sales tax was not collected
From vendor outside WA state
From vendor not authorized to collect sales tax
Amazon
Private party

4. How is comp tax calculated?
Same calculation as sales tax
Based on value of goods when first used in WA
Usually purchase price
Tax rate where the goods were first used
Include freight, delivery, or shipping charges

5. DOR Washington State Department of Revenue www.dor.wa.gov
Tax rate charts published quarterly
Location-based lookup
My Account
E-file
Binding tax ruling via secure messaging

6. Comp tax rates - DOR

7. More information Reference codes RCW 82.12 RCW 82.14 WAC 458-20-178

8. Setup and Maintenance System Options Summary Account AP ACH
Vendor Profile
Comp Tax Setup

9. System Setup
System Options
(SA\FM\II\SO)
Comp Tax Vendor

10. System Setup Payroll Tax Information Options (SA\FM\FM–Payroll)
Setup UBI Number

11. Summary Account AP Comp Tax Summary Account (FM\SE\CO\AM\SA)
** L or
** L

12. Deselect checkbox on Show All Summary Accounts
Choose A/P Comp Tax on Summary Account Type Filter
Add new summary account, if needed
Select new default summary account
Click Default Account, then ok
AP Comp Tax Summary Account
(FM\SE\CO\AM\SA)
To make changes:

13. AP ACH Setup Bank Setup (WF\AP\AP Setup\ PS\CF\AC)
WA ACH Comp Tax Payment Setup

14. Vendor Profile
Dept. of Revenue AP ACH Setup WF\VE\VP\AC)

15. Comp Tax Setup
Tax Districts
Tax Type Codes
Tax Rates
Sites

16. Tax Districts Defined by DOR
Set up by location(s) your district receives goods
Recommend using DOR codes and descriptions

17. Tax District Setup
(FM\AP\CT\SE\CT\TD)

18. Tax Type Codes Stores code and description Set up per DOR requirements
Sales
Local
Transportation
Other types
Set up per DOR requirements
Indicate if local

19. Tax Type Code Setup
(FM\AP\CT\SE\CT\TT)

20. Tax Rates Stores current and historical rates
Includes rates for each Tax District
Add new records as rates change
AP Invoice date drives which rate is used

21. Tax Rate Setup (FM\AP\CT\SE\CT\TR)

22. Sites Shipping destination Attach to Tax Districts
School or other building within district
Warehouse
Attach to Tax Districts
Selected during AP Invoice entry
Shared with Fixed Assets module

23. Site Codes Setup (FM\AP\CT\SE\CT\SI)

24. Apply Comp Tax to AP Invoices
Invoice type: YMA
Comp Tax is calculated on entire invoice
Cannot edit detail lines
Invoice Type: YDA
Comp Tax is calculated on individual detail lines
Each detail line can be edited

25. AP Invoices With Comp Tax

32. Comp Tax Reports Comp Tax Status Report
Comp Tax Generated Invoice Report
Comp Tax Reporting Totals

33. Comp Tax Status Report View source invoices Reconcile L 611 (or 630)
Sequence options
Vendor
Invoice Date
Cash Account
Comp Tax Status

34. Comp Tax Status Report

35. Comp Tax Generated Invoice Report
Elements of generated invoices
Lists source AP invoices
Multiple invoices
Funds
Bank Cash Accounts

36. Comp Tax Generated Invoice Report

37. Comp Tax Reporting Totals
Generated invoice(s)
No source invoice(s)
Fill out Excise Tax
Reconcile Comp Tax

38. Comp Tax Reporting Totals

39. Generate Invoices to Pay Comp Tax
Electronic payment requirements
Monthly - online
Quarterly - online
Annually – online or by mail

40. Source AP Invoices - Reqirements
To be pulled into Generated Comp Tax Invoice
Must be flagged for Comp Tax
Invoice date must be on or before the cutoff date
History status – paid and updated
Not previously selected for Comp Tax

41. Comp Tax Selection – Generate Invoice
Select cash account
If more than one, process must be done again
Choose cutoff date
Invoices beyond this date will not be pulled in
Verify totals
Enter invoice creation parameters

43. Generating Invoice for DOR
After clicking Generate Inv:
After clicking Yes:

45. Use AP Invoices to Make Adjustments
ISSUE – Comp Tax owed to the DOR needs to be increased; and those changes need to be reflected on a Comp Tax Generated Invoice and included on Comp Tax Reports.
Example as to why this might be necessary:
A user entered a YDA Invoice and didn’t mark one of the Line Items for Comp Tax. The AP Invoice is now in History status.

46. Use AP Invoices to Make Adjustments
Solution – To increase the amount of Comp Tax, do the following:
Add a Source AP Invoice to accrue the extra Comp Tax owing, with Line Item amounts that total $0.00
Batch Update to Open status and run through the Check Register
After this Source AP Invoice is in History status, the tax increase will be available to generate

47. Adjustments PO Number Vendor Accrual Account Comp Tax box
Comp Tax Site
Invoice Date
Bank Cash Account
When adding an AP invoice for adjustments, use the same data as the original invoice for these fields:

48. Adjustments Unique Batch ID YDA Layout Zero dollars ($0.00) for
Invoice amount
Tax
Other
When adding an AP invoice for adjustments:

50. Add first Detail Line
Select the Taxable option and ensure Site is correct
In Unit Cost, enter the taxable amount
Amount that was not flagged that will generate the desired tax amount

51. Add offsetting Detail Line
Do not select the Taxable option
No Site selected
In Unit Cost, enter the negative amount to offset the first detail line

52. Verify the invoice
Click Show Comp Tax on the Invoice Entry screen to see the Calculated Comp Tax amount on the $0.00 total invoice:

53. Adjustment to reduce Comp Tax
Similar process as adjusting to increase
Follow same steps
Detail line with negative amount is flagged taxable
Detail line with positive amount is unflagged

54. Questions?
Thank you!

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