EBusiness tax feature "Tax for Reporting Purposes Only"

Question

Hi everyone,
Did anyone used "Set Tax for Reporting Purposes Only" feature in Etax? If yes, then can you, please, describe me how works in AP/AR modules. Because for some reasons I cannot make it work and Etax User Guide does not contain much information about it.
Thanks in advance,
Vladimir

Answer 1

As I mentioned in the PM, I'm going to list an alternate tax solution here.
It involves using a single tax amount (the lower amount) on all products. That may not sound right, but with some additional steps it's not a bad solution.
Assuming you have two tax amounts, one at 7.5% and another at 9%, you assign all taxable products the lower tax amount.
Then you change the price of the higher taxed products by the difference in the percentage. (if the product was $1, then it is now $1.02) Part of why this works is because the increase is not so significant that customers would usually care.
Using the product attributes, you set up a dropdown list with the options, "tax1" and "tax2"
Each product, in a custom1 field is assigned its appropriate tax name (tax1 or tax2).
The dropdown list is hidden, so the customer doesn't know it's there
When a customer looks at a large product view, js automatically selects the appropriate attribute based on what is in the custom field.
Set up two reports, one for each tax group.
Filter them by attribute, so only the applicable products are shown in the report
Using very simple math (Total x 1.075 and Total x 1.09, depending on which report it is), the accountant will know exactly how much to pay in taxes for each tax type.
At first glance, this looks like a bad solution, but all that really matters is that the company is collecting and paying their taxes. Your client charges the lower amount so they are not overcharging taxes (kind of illegal). The slight price increase of the higher taxed products covers the rest and then some.