Implementing County and City Sales Tax Jurisdiction


Posted October 2004

New sales tax regulations in the state of Ohio go into effect in Jan. ’05 which require reporting taxes based on the county/city rather than just for the state as a whole. Following is a guideline of how to set up tax rates for different local tax jurisdictions within a state and have them automatically applied at the point of sale.

Edit Chart Of Accounts: The first step will be creating some new G/L account numbers in your chart of accounts for these new local jurisdictions. Use separate G/L account numbers for each new county/city jurisdictions in order for the amounts to be tracked separately on your sales tax reports and/or invoice journals. You’ll need G/L codes for each exemption classification state requires be tracked, usually just Taxable & Exempt. It is recommended that all the sales tax G/L account numbers be liability accounts and take advantage of the “similar account” feature by keeping the first four digits the same.

Edit cmStat File: The next thing you would do is set up the new codes in the cmStat file in the Customer Management Menu (must be logged on as root). The coding scheme you use is critical and will be used again within the sales tax part records. Typically one uses two characters for the state, two for county, and two for the city. For example OHFR__ would be for Ohio sales tax in Franklin County. If the city of Columbus accesses an additional local sales tax, we’d use OHFRCO.

Edit Inventory Part File: Next, setup new part numbers in the Inventory Part File. Use your current “$TAX??????Y” & “$TAX??????N” part numbers to clone from. Change the inside six characters (??????) to match the State/Tax codes chosen above, and the description to reflect the county/city name. For example $TAXOHFR__Y would be for OHIO/FRANKLIN SALES TAX. Finally, enter the tax rate for this locale as the list price and all three cost fields.

Picked Up vs Delivered

When your order is marked as a cash counter or charge counter (sales category 1 or 3), the system will apply the jurisdiction of your warehouse location. When a delivery is marked as anything else, typically cash delivery or charge delivery (sales category 2 or 4), it will look to the Customer Master File to get the delivery jurisdiction for the customer.

Edit icWhse File: When sales are picked up at each of your stores, the sales tax of the jurisdiction your store is located in must be used instead of the customers delivery location. Therefore, you may need to change each of your warehouses State/Tax jurisdiction.

Edit Customer Master File: Next, you need to adjust each customer’s master record with the correct State/Tax Jurisdiction. You may want to print a “Customer Address Listing” limited to the appropriate State field (OH through OH~~~~) so you can get a listing of all affected customers. A more automatic method would be to use Establish State Codes restricted by the Zipcode for affected locales and entering the appropriate code in the New State Code field.

Edit oiKey4 File: This file is identical to the “Edit cmStat File” in the Customer Management Menu (see directions above), but located in the Order Invoicing Menu. You can go right down the list of all counties you entered in the cmStat file and enter them here also.

Edit ccTaxs File: This file is likewise identical to the “Edit cmStat File” but is found in the Cylinder Control Menu. It controls the jurisdictions & rates for cylinder rental and lease renewal invoices.

Visit tax.ohio.gov/online_services/thefinder.stmfor help determining each Ohio county/city tax jurisdiction and applicable rates.