Table of Contents
Purpose
Tax Entities represent state, county, or city tax locations. Tax Entities can be grouped together using the Tax Jurisdictions screen to define broader areas called Tax Jurisdictions.
The Tax Entity Report summarizes taxes collected for each tax entity for a specific time period. You can use this report to get detailed tax-related information from Aspire!
Requirements
📑You’ve read Setting Up Sales Tax in Aspire, here.
✅You have View Reports permission and the View Tax Entity Report permission added to your User Role.
Understanding the Tax Entity Report Columns
The Tax Entity Report is split into two groups of columns for reporting; they are called Invoiced Dollars and Payment Dollars.
Invoiced Dollars Group
🧠 If you are paying taxes based on invoices from a specific time period, you will use the columns highlighted in gray.
This is also known as the Accrual Method Group of this report.
Click here to read about these columns!
Payment Dollars Group
Payment Dollars represent payment received for an invoice. If you are paying taxes based on payments that have been applied to invoices, you should use these columns.
Click here to read about these columns!
Next, we will review each column in this report, and explain what they mean!
Tax Entity Column
Regardless of the columns you use in this report, the Tax Entity column will display all tax entities that are in use for the time period you are reviewing the report for.
The other vertical columns are used to further break down the data for each Tax Entity that is displayed in this column.
Columns for Paying Taxes Based on Invoiced Dollars from a Specific Time Period
🧠 If you are paying taxes based on invoices from a specific time period, you will use the columns highlighted in gray.
Invoiced Dollars Column
The Invoiced Dollars column will show:
The net total amount of all invoices, minus their taxes.
Credit Memos, including Sales Tax.
📌Note: Each Tax Entity line will show the total Invoiced Dollars amount. This column does not break down each entity's percentage. The total of this column will look inflated if you have multiple Tax Entities in a Tax Jurisdiction.
Taxable Dollars Column
The Taxable Dollars column will show:
Total invoiced amount of taxable services.
This amount will include dollars from Tax Exempt Properties.
To explain this further, this means that if the property is marked as Tax Exempt, but there are services or items on the estimate that are marked as taxable, they will appear in the Taxable Dollars column.
Credit Memos, including Sales Tax.
📌Note: Each Tax Entity line will show the total Taxable Dollars amount. This column does not break down each entity's percentage. The total of this column will look inflated if you have multiple Tax Entities in a Tax Jurisdiction.
More Information on How to Understand Inflated Amounts for the Invoiced Dollars and Taxable Dollars Columns:
To understand what the expected behavior should be with these reports, below is an example of Tax Jurisdiction with multiple Tax Entities and the Invoiced and Taxable Dollars.
📌 Note: The Tax Jurisdiction and Tax Entity Percentages used below are fictitious and are used for examples, only.
Let’s start with an invoice of $1000 for a property with a Tax Jurisdiction in Dallas.
The Dallas Tax Jurisdiction is 11%, which calculates to $110 Total Sales Tax for this invoice.
This is calculated from the entities that make up the Dallas Tax Jurisdiction.
The Dallas Tax Jurisdiction has 3 Tax Entities: Dallas MTA (2% or $20 for this invoice), Dallas City (6% or $60 for this invoice), and State Sales Tax (3% or $30 for this invoice).
When reviewing the Tax Entity report data, each entity will show $1,000 for Invoiced Dollars making a total of $3,000.
Look at the Tax Amount Column:
📌Note: The Tax Amount column will display the accurate Sales Tax amount for each tax entity!
Tax Amount Column
The Tax Amount Column will show:
The Calculated Tax Amount of the Taxable Dollars on Taxable Properties.
Credit Memos, including Sales Tax.
The total of this column will match the Sales Tax on the Revenue tab on the End of Month report.
Columns for Paying Taxes Based on Received Payments
Next, we will review the columns that are highlighted in white in this report.
The Payment Dollars, Taxable Dollars, and Tax Amount columns on this portion of the report represent payment received for an invoice.
💡Reminder: If you are paying taxes based on payments that have been applied to invoices, you should use these columns.
Payment Dollars Column
The Payment Dollars column will show:
The dollar amount paid that has been applied to an invoice.
If the payment has not been applied to an invoice it will not show up on the Tax Entity Report.
The net total amount of payments applied to invoices, excluding tax.
📌Note: The Payment Dollars amount applied to the invoice will appear on this report in the month the payment was applied.
An example of this is if you receive a payment in June and don’t apply it to an invoice till August, August is the month that will count the Payment Dollars for that invoice.
Drill into the Payment Dollars total for Dallas City:
You can see the payment was applied with a backdate of June, but it’ll still appear on the Tax Entity Report for January since that’s when the invoice payment was applied.
📌Note: Credit Memos with Sales Tax will not be reflected in this column automatically. You will need to track these amounts and subtract them from the total.
Each tax entity line will show the entire Payment Amount. The total of this column will look inflated if two different invoices are paid with the same check or credit card.
Example: If a client pays two $800 invoices on the same check, the Payment Dollars column will display $1,600 twice because it shows the payment total and not the amount applied to the invoice.
Taxable Dollars Column
The Taxable Dollars column will show:
Total invoiced amount of taxable services.
This amount will include dollars from Tax Exempt Properties.
To explain this further, this means that If the property is marked as Tax Exempt, but there are services or items on the estimate that are marked as taxable, they will appear in the Taxable Dollars column.
📌Note: Credit Memos with Sales Tax will not be reflected here. You must manually track those amounts and subtract them from the total.
Tax Amount Column
This column displays the calculated tax amount of taxable dollars from Invoices that a payment was applied to for taxable properties.
📌Note: Credit Memos with Sales Tax will not be reflected here. You must manually track those amounts and subtract them from the total.
Comparing Invoiced Dollar Amounts for Multiple Tax Entities
🧠 If you have only one tax entity in each of your tax jurisdictions, you can skip this section and move onto the next section! 👇
If you have multiple entities in your tax jurisdictions, you will need to confirm the true Invoiced Dollars for the month. Follow the instructions below.
You will need to first navigate to the End of Month report in the Reporting module.
Once you are in the End of Month report Revenue tab, change the Date Range filter to the date range you want to review the true Invoiced Dollars for.
Scroll to the All Branches Revenue section of the report and select Invoices.
Add display columns for Amount and Tax and under the Total drop down on these display columns, make sure the selection is marked as Sum.
This report will now display everything that has been invoiced except for Credit Memos.
Then, go back to the main End of Month report and the All Branches Revenue tab. This time, drill into the Credits line item.
Add the display columns of Sale Amount and Tax and under the Total drop down on these display columns, make sure the selection is marked as Sum.
You can take the Invoiced Amount Total and subtract the Credit Memo Sales Amount and then, you will have the true Invoiced Amount for the month.
Comparing the Tax Amount in the Tax Entity Report to the End of Month Report for the Same Date Range
If you need to compare the Tax Amount in the Tax Entity report to the End of Month report for the same time period for extra accuracy, follow the instructions below:
You will need to use the End of Month report for this process as well, so navigate to the Reporting module.
Once you are in the End of Month report Revenue tab, change the Date Range filter to the date range you want to review.
Scroll to the All Branches Revenue section of the report and select Invoices.
Add the display column of Tax and under the Total drop down on these display columns, make sure the selection is marked as Sum.
The Tax amount does not include any Credit Memos.
Next, go back to the End of Month report’s All Branch Revenue and drill into the Credits line item.
Add the display column of Tax and under the Total drop down on these display columns, make sure the selection is marked as Sum.
Use the Invoice Tax amount and subtract the Credit Memo Tax amount.
That should equal the Total Sales tax and also will match the total Tax amount in the Tax Entity report.