Writing off sales taxes while paying an invoice

Use Customer Cash Receipt Entry to write off sales tax while an invoice is being paid. For example, you have processed an invoice for a customer, and the invoice incorrectly included tax; the customer sends you a check for the total minus the total tax. Use this function to indicate that the invoice is paid-in-full without the tax, which you then write off. You must have correct security in SA Operator Setup to write off cash receipts.

Note: If you use Sovos GTD, AvaTax, or Vertex Cloud, and clear the Post To Tax Interface For Tax Writeoffs check box on the SA Administrator Options - Customer - Cash Receipts screen, you must use a correction instead of writing off the sales tax.
  1. Select Customer > Entry > Cash Receipts.
  2. Click OK to open a journal.
  3. Select the Payment transaction type.
  4. In Check #, specify the customer's check number.
  5. In Amount, specify the amount of the check.
  6. Click Next.
  7. Select the Customer type.
  8. Specify the customer number.
  9. Click Next.
  10. In the grid, select the invoice to be written off. The invoice amount shows both the invoice total and the taxes.
  11. Click Paid In Full, or if the amount available is zero (Avail: 0.00), select the check box in the Paid In Full column in the grid manually.
  12. Press Tab.
  13. In the Apply Amount field, specify the invoice amount without tax (invoice total - total taxes = Apply Amount).
  14. Press Tab.
  15. In the Write Off Distribution window, specify a write off GL account in Account.
  16. In the grid, select the invoice.
  17. Click Writeoff Tax.
  18. Verify the accounts, and the click Done.

    The Update Tax check box is automatically selected. This indicates that the tax write-off data must be posted to the third-party tax systems.

    Note: 
    • The Update Tax check box is displayed only when the following conditions are met:
      • The third-party tax systems such as Sovos GTD, AvaTax, or Vertex Cloud are used.
      • The Post To Tax Interface For Tax Writeoffs check box is selected on the SA Administrator Options - Customer - Cash Receipts screen.
    • The Update Tax check box is enabled only after the Writeoff Tax is applied.
    • If the Update Tax check box is cleared, the tax write-off data is not posted to the third-party taxing system. You must manually update the tax-exempt information.
  19. Click Save. A note is created for the associated sales order that includes the write-off date and amount. The Sales Order Master List report also includes the tax write-off data.
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