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Datto Autotask PSA: How can I apply or remove tax on billing items?

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Question

How can I apply or remove a tax on billing items?

Environment

  • Datto Autotask PSA

Answer

To apply tax to your billing items, you will have to use a taxable billing code (work type, material, service code, etc). If there is not a tax code associated with the billing code, or if there is no billing code on the item, then no tax will be applied.

To apply tax:

1. Set up your Tax Region and Tax Category. You can do so from Autotask menu Admin Features & Settings Finance, Accounting & Invoicing Tax Regions & Categories.

2. Associate Tax Categories with billing codes. To do this, navigate to Autotask menu → Admin → Features & Settings → Finance, Accounting & Invoicing → Billing Codes. Then, edit the billing codes under the different tabs, making sure that they have the correct Tax Category selected.

3. Associate Tax Regions with companies. Open the Company Detail page. From the contextual menu, select Invoice Preferences.

4. When adding billing items to the system, such as time entries and charges, make sure a taxable billing code is associated.

5. To remove tax from billing items, either select a non-taxable billing code when entering the item or disassociate the Tax Category with the billing codes used on the items.

NOTE: If you change the tax rates for a tax category, the tax on existing invoices will not update. Changes to tax configuration only take effect on un-posted billing items.

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