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MAXA - Online Help - Last updated December 19, 2006

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90  Can Maxa be configured to handle some of the crazy tax calculations found in some states?

Yes. Tennessee in particular has a difficult tax situation. Here's an attempt at explaining it.
  • The first $1600 of each item is taxed at a 9.25% rate.
  • The next $1600 (up to $3200) is taxed at a 9.75% rate.
  • Any amount over $3200 is taxed at 7%.

And this applies to each item --- not the invoice total!

Using notepad, create a file called C:\MAXA\FTAX.DAT

In the file add the following lines...

    0
    -8
    80
    0
    0
    0

Each line represents the offset tax to apply to each tax class, starting with the standard tax class (Y), then A, B, and C.

In Maxa, set the tax rates as follows...

  • Standard = 9.25%
  • Tax class A = 9.75%
  • Tax class B = 7.00%

The standard tax class (Y) has an offset of $0. The class (A) has an offset of -$8.00. This is arrived at by taking the difference in the standard tax (9.25%) and the tax rate for class A (9.75%) and multiplying that times the breakpoint of $1600 to get the offset of -$8.00. We make it a negative since the second rate (A) is higher than the standard rate (B). The offset for tax class B is $80. This is calculated by taking the difference between rates A and B (2.75%) and multiplying that times the second breakpoint ($3200) = $88 and adding the earlier offset (-$8) to come up with $80.

So... any item that sell for less than $1600 will be charged a flat 9.25%. Any item that sells between $1601 and $3200 will be charged 9.75% on the item price less $8. Any item selling for more that $3200 will be charged a rate of 7% for the full amount plus $80 per item.

To have the items properly taxes each must be assigned to the appropriate tax class (Y, A, or B). This can be done easily in the modify/view sales data area. Sort the items in to price order and then use the space bar to mark the items in a given price range (ex: $1601-$3200) then press 'M' for marked and change the tax class to 'A'. Repeat the process for items over $3200 and set the tax class to 'B'.

It is pretty obvious that the people who make the tax laws in Tennessee never have to collect it!