You can apply Sales Taxes within VT in several areas to create default settings and to adjust to unique requirements. All Sales Taxes must first be entered in the Sales Tax Setup dialog before you can use them anywhere in VT.
VT performs billing by Statement Groups. You can select some or all of the defined sales taxes as usable on the Statement Groups dialog in the Sales Tax Setup dialog. Each Statement Group has a separate tax application list. If you apply more than one tax, the order of the taxes in the tax application dialog is important if any of the taxes has the Previously Applied Taxes box checked.
Each Advertiser record contains an Apply Taxes dialog that can be accessed from the A/R Settings options. This dialog typically contains default taxes based on the settings on the Statement Group Sales Tax Setup dialog. You can change the settings from the default values for each advertiser. The only taxes you can select from are those that have been selected on the Statement Group tax setup. The order that taxes appear on the list affects tax assessment values.
The same type of tax application dialog that appears on the Advertiser also appears on the order and the Edit Invoice Definition dialog. This means you can further specify tax applications by order and even by the individual invoices created by the order. All of the taxes you can apply are taxes that have already been applied on the Statement Group tax setup level. These are the only taxes you can select to apply at the Advertiser, order, and invoice level. The "lower" levels always assume the default settings of the levels that are "higher" but they can be changed.
When you apply more than one tax the order of arrangement of the taxes is important if any of the taxes has the Previously Applied Taxes checkbox enabled. The order of tax application can be adjusted at any level using the Move Up and Move Down buttons.
As an example we will use an invoice where the adjusted gross amount to be taxed is $100.00. We will have three tax definitions to apply. For ease of understanding, each tax will apply a 10 percent tax. Here is the order in which they appear in the tax application list. Only the second tax has the Previously Applied Taxes box checked.
Taxes One and Three simply apply a 10 percent tax to the original amount of $100.00 which means the tax amount is $10.00 for each tax. Tax Two is checked to apply a tax to any previously applied taxes. Since Tax One appears higher on the application list than Tax Two, that means that Tax Two will assess a 10 percent tax on the original invoice amount ($100.00) plus the tax applied by Tax One ($10.00). So Tax Two will calculate a 10 percent tax on $110.00 which will yield a $11.00 tax.
Tax Three will not calculate previously applied taxes so it only applies a $10.00 tax, which is 10 percent of $100.00.
The total invoice amount is $100.00 plus the three tax calculations of 10.00 + 11.00 + 10.00. The total invoice amount is $131.00. The tax figures for previously applied taxes would vary according to the order the taxes appear on the list.