Sales Tax - General Information
The Prime Downline system has the ability to assess sales tax in U.S. states and Canada. Taxes are assessed based on the zip code and applicable jurisdictions in that zip code. Prime Downline uses an independent service that provides monthly sales tax rate data that is used to update the standard jurisdictional sales tax rates on the first day of each month.
The taxable amount of the item is to be populated in price amount 3 when you setup your item codes.
Whether your products are subject to sales tax is a decision each client company must make. The Prime Downline system does not make that determination. If you believe all or some of your products are not subject to sales tax you have two options:
- The product code must be NOTAX, the sale amount is populated in price amount 3 and this will cause the sale to be included on the sales tax reports but at a rate of zero percent, or
- Leave price amount 3 blank and this will cause the sale to not be included on the sales tax reports.
Both of these options will result in zero sales tax being assessed on the item. Some states require companies to report the non-taxable sales and the company should use option (1).
If you believe your products are taxable in certain states but at a rate different than the standard sales rate for that state you must tell Prime Downline the state/jurisdiction and the alternate tax rate. This service requires the advanced sales tax module.
The system produces monthly sales tax reports the client can use to prepare and submit the reporting as required. This is not a service provided by Prime Downline.
The order checkout screen indicates the jurisdiction being used to assess sales tax. If the zip code spans multiple jurisdictions there will a dropdown to allow the user to select the appropriate jurisdiction. If an option does not exist that meets the users requirement please notify Prime Downline and we will add one. There are situations where someone lives in an unincorporated area that is not subject to city tax or district tax and the option for the reduced rate may not be displayed on the dropdown.
The Prime Downline system has defaults enabled for each state as to the taxability of freight. If you would prefer different taxability for freight just let Prime Downline know.