Overview

• The Office System allows the user to create various combinations of Tax and Service Charges that can be applied at multiple levels.  In this guide, we will learn how to set up Taxes, Service Charges, make Tax percentage changes, set up items to point to the correct Tax and Service Charges, apply Tax Code overrides, and review the variables impacting the Tax application.

• Tax and Service Charge have two layers in the Office System.  Tax Code Items are where the user sets up the individual Tax and Service Charge rates.  Tax Codes are where the user sets up the combinations of Tax and Service Charge to apply to an item/area.

Required Permissions

• System

• System Settings

• Items

• Add/Edit/Delete Item Groups and Categories

• Add/Edit/Delete Tax Code Items

• Add/Edit/Delete Tax Codes

Accessing the Tool

Tax Code Items

Tax Code Items are where the user sets up the individual Tax and Service Charge rates.

To access Tax Code Items:

1. Navigate to System across the top toolbar and select Tax Code Items.

2. The Tax Code Items grid will launch.

3. The primary functions associated with managing Tax Code Items are embedded in the Tax Code Item setup screen, which can be accessed by clicking the New button or double-clicking on an existing item.

Creating a New Tax Code Item

To create a new Tax Code Item,

1. Navigate to the Tax Code Items Grid and perform either of the following to launch the Tax Code Item setup screen:

   • Click the New icon on the toolbar.

   • Right-click anywhere on the Tax Code Items Grid and select New.

2. The Tax Code Item setup screen will launch.

Tax Setup

When setting up a tax, complete the following information:.

1. Name - Give the Tax Code Item a name. The name you give the Tax Code Item should be a distinctive description, especially if there is more than one percentage or rate. 

2. Description - Enter an optional description for internal purposes.

3. Tax Type - Click the drop down arrow and select the Tax Type.

Complete the Defaults as needed:

1. Rules - Click the drop down arrow and select the rule that applies. Options include:

   1. Base - will tax the total of each taxable item not including Service Charge.

   2. Base + Service Charge -  will tax the total of each taxable item including the Service Charge - both item and service charge will be taxed.

   3. Service Charge - will only tax the service charge total and will exclude all items taxable and nontaxable. 

2. Percentage - Enter the Tax Percentage (if this is not a percentage leave blank and go to Rate). 

   1. Rate - Enter the Rate if applicable (this is a flat dollar amount). 

3. Minimum Sales Amount to Tax - Use if tax is not to apply to an item price less than a specified amount. Example: if the minimum sales amount to tax entered is $20.00, the system will not tax items less than $20.00 ($19.99 and less). 

4. Maximum Sales Amount to Tax - Use if tax is not to apply to item price greater than a specified amount. Example: if the maximum sales amount to tax entered is $20.00, the system will not tax items over that amount ($20.01 and greater). 

5. Ledger - Browse to the General Ledger and select the ledger account the tax will post to. 

6. This Tax is Exemptible - If this tax can be exempted or waived, check the box. If the box is not checked, tax will be calculated even if the member, member group or item is flagged as Tax Exempt. 

7. Only Apply Tax Rate to the amount beyond the minimum sales amount - This works in relation to Minimum Sales Amount to Tax. This box would be checked for states that only tax an item over a certain dollar amount. For example, a clothing item is taxed only if it exceeds $150. If a jacket is purchased for $200, sales tax would be applied on $50 ($200 - $150 = $50). In this example $150 should be the Minimum Sales Amount to Tax.

Service Charge Setup

When setting up a service charge, complete the following information:

1. Name - Give the Tax Code Item a name. The name you give the Tax Code Item should be given a distinct description, especially if there is more than one percentage or rate. 

2. Description - Enter an optional description for internal purposes. 

3. Tax Type - Click the down arrow and select Service Charge. 

4. Percentage - Enter the Service Charge Percentage (if this is not a percentage leave blank and go to Rate). 

5. Rate - Enter the Rate if applicable (this is a flat dollar amount). 

6. Minimum Sales Amount to Tax - Does not apply to a Service Charge Tax Code Item. 

7. Maximum Sales Amount to Tax - Does not apply to a Service Charge Tax Code Item.

8. Ledger - Browse to the General Ledger and select the ledger account the tax will post to. 

Service Charge Override 

This is used when certain Members or Areas have different Service Charge rules than the normal setup. There are a few different ways in the system to have automatic Service Charges applied at different rates depending on the club rules. Contact Clubessential Support to help you decide the best setup for your club policy. 

Before creating the Service Charge Override, the user must first apply the Service Charge Group Type in System Settings and create a Service Charge Member Group to set up the override; as described below.

System Settings

The first step is to apply the Service Charge Group Type in System Settings. To do so,

1. Navigate to System across the top toolbar and select System Settings.

2. Navigate to the Membership tab and select Service Charge in the Service Charge Group Type section.

Set Up Service Charge Member Group

The next step is to set up the Service Charge Member Group.  All Members who should receive the Service Charge Override should be selected in this Member Group.

To set up the Service Charge Member Group,

1. Navigate to Membership across the top toolbar and select Groups.

2. Click the New icon on the toolbar.

3. The Member Group setup screen will launch. Enter all relevant information shown/listed below:

   • Name - Give the Member Group a name.

   • Description - Enter an optional description for internal purposes.

   • Group Type - Select Service Charge as the Group Type.

   • Members - Select all Members who should be included in the group.

4. Select Save & Close.

Rules

The last step is to create the rules for the Service Charge Override.  To do so,

1. Navigate to the applicable Service Charge Tax Code Item and select the Service Charge Overrides tab.

2. Click Add New Rule and enter the appropriate information shown/listed below:

   1. Member Group - Select the Service Charge Member Group.  Please note that only Member Groups with a Service Charge Group Type will be displayed in the lookup.

   2. Area - Select the Area the override applies or select All Areas if the override should occur at all Areas in the club.

   3. Percentage - Enter the Service Charge Percentage (if this is not a percentage leave blank and go to Rate).

   4. Rate - Enter the Rate if applicable (this is a flat dollar amount).

   5. Ledger - Browse to the General Ledger and select the ledger account the tax will post to.

   6.  Save Rule Edit - Be sure to select Save Rule Edit.

3. Select Save & Close AFTER you have selected Save Rule Edit.

Note: Do not use more than one override with conflicting rules for members who may be in multiple groups, this will cause the POS to ignore the overrides and just use the default Service Charge. Example: Club has a standard Service Charge rate of 18%. John Smith is in member group A which has a Service Charge Override to charge 20% to the Dining Room area. John Smith is also a member of group B which has a Service Charge Override of 25% to the Dining Room area. Because John Smith is part of two overrides for the same area, the system will ignore the overrides and assign the default Service Charge rate to the transaction for that item.

Tax Codes

As previously mentioned, Tax Codes are where the user sets up the combinations of Tax and Service Charge to apply to an item/area. 

Accessing Tax Codes

To access Tax Codes:

1. Navigate to System across the top toolbar and select Tax Codes.

2. The Tax Codes grid will launch.

3. The primary functions associated with managing Tax Codes are embedded in the Tax Code setup screen, which can be accessed by clicking the New button or double-clicking on an existing code.

Creating a New Tax Code 

To create a new Tax Code,

1. Navigate to the Tax Codes Grid and perform either of the following to launch the Tax Code setup screen:

   • Click the New icon on the toolbar.

   • Right-click anywhere on the Tax Codes Grid and select New.

2. The Tax Code Item setup screen will launch.

3. Please enter all appropriate information:

   • Name - Give the Tax Code a name. The name you give the Tax Code should be given a distinctive description, especially if there is more than one percentage or rate.

   • Description - Enter an optional description for internal purposes.

   • Taxes - Select the applicable combination of Tax Code Items using the Lookup.  Again, Tax Codes are what you select to apply Tax and Service Charges to items. Be sure to select the correct combination. 

Applying Tax Codes and Overrides 

Tax Codes are applied at the Item Group level, but can be overridden at the Item Category level if applicable.

Item Group

1. Navigate to Items on the left user menu and select Manage Item Groups.

2. The Item Groups Grid will launch. Double click on the applicable Item Group to launch the Item Group setup screen.

3. Navigate to the Tax Code field and select the proper Tax Code.

4. Area Overrides - If different Areas have different Tax Codes, be sure to highlight the applicable Area from the left pane labeled Area Overrides and choose the correct Tax Code.

Item Category

As previously mentioned, if a certain Item Category should have a different Tax Code than its Item Group, the Item Group settings can be overridden.

To override the Item Group Settings,

1. Navigate to Items on the left user menu and select Manage Item Categories.

2. The Item Categories Grid will launch. Double click the applicable Item Category to launch the Item Category setup screen.

3. Check Override Item Group Settings.

4. Navigate to the Overrides Tab and select the applicable Tax Code.  If the Overrides tab is not active be sure to check Override Item Group Settings.

5. Area Overrides - If different Areas have different Tax Codes, be sure to highlight the applicable Area from the left pane and choose the correct Tax Code.

Note: Only Areas selected on the Areas tab within the Item Category will show as an override option on the Overrides tab.

Change Tax Code Item Percentage/Rate 

To change the Tax percentage of a particular Tax Code Item,

1. Navigate to the Tax Code Items Grid and double click the appropriate Tax Code Item.

2. Change the Percentage or Rate appropriately.

Important: 

• All items pointing to the Tax Code Item will immediately be affected by the change. Do not change the tax percentage or rate until the new rate goes into effect.

• If the Tax Rate or Tax Code is changed in the middle of the day, all items that have previously been rung up and added to a ticket will have the old rate. The only way to get the new tax rate is to delete the ticket and re-enter the sale.

• Sales and credits will be calculated at the new rate from the time you change the rate.

• The systems applies taxes and service charge on an item level not a subtotal level. 

Reporting 

If at any time a user would like a list of items and their respective Tax Codes, please follow the below instructions.

1. Navigate to the Interactive Reports module on the left user menu, expand Item, and select Item G/L Posting Summary.

2. If the user would like a list of ALL items and their Tax Codes, leave the Item field set to None.  To see just one item, select the applicable item within the Item field.  Set the Type to Tax Code and select View Report.

The Report will display the item, the Tax Code, Configuration Level, and Configuration Path.

• Configuration Level - The level, either Item Group or Item Category that is defining the Item’s Tax Code.

• Configuration Path - The location of the Item Group/Category that is assigning the Tax to the Item.

Note: If an item displays more than once, this means the item has varying taxes applied depending on the Area in which it is sold.

Best Practices

• Plan for legislative or upcoming Club changes to Taxes and/or Service charges to ensure implementation is proper.

• Periodically review the Item G/L Posting Summary to ensure tax applications are proper.

FAQs

• Q: When I change a tax rate, how soon is it applied?

• A: The tax rate changes immediately upon saving the change.  If performed in middle of the day, tickets created prior to the change will contain the old tax rate.

• Q: When looking to establish a Sales Tax override for an Item Category (to make it different than its Item Group default), I am unable to locate the Overrides tab, where is it?

• A: If the Overrides tab is not active within the Items Category, be sure the Override Item Group Settings option is checked within the Category.