Charge sales tax on an invoice
Add your rate, choose which kinds of line it taxes (parts but not labor, say), and mark customers who are exempt. Each line is taxed by what it is.
For owners and admins
WebSettings → Sales tax. Add your rate, then choose which kinds of line it applies to, for example parts and goods but not labor. From then on, every invoice you raise with New invoice taxes each line by that rule, and whoever raises it can tick or untick a single line. Flight bills from close-out are not taxed.
Sales tax is decided line by line, because it depends on what the line is. In most states that tax repairs, the parts are taxed and the labor is not, as long as the two are on separate lines. Shop supplies are usually not taxed at all. So each line on a bill you raise by hand says what it is, and your school's rules say which of those are taxed.
Set it up#
Add your rate
WebSettings → Sales tax → Add rate. If all your airports are in one state, the form starts filled in from their address: the state, a name like Idaho sales tax, and the state's statewide rate. Check it before you add it. The statewide rate is the floor: add any city or county tax on top. The rate takes up to four decimal places, so a New Mexico rate like 8.1875 is fine. Pick a different state and the name and rate follow it.
Choose what gets taxed
Your first rate offers Apply it to Parts and goods, ticked, because that is the usual rule. To change it later, go to What gets taxed: pick the rate for each kind of line your state taxes, leave the rest on Not taxed, and click Save. A shop in Idaho taxes Parts and goods and leaves Labor, Shop supplies, and Freight and shipping untaxed.
Adding a rate on its own taxes nothing automatically: it puts a Taxable tick on every line of New invoice, and only the kinds of line you choose in step 2 are ticked for you.
Only the owner can change these settings. Admins can see them.
Outside the US#
Choose Outside the US as the state, pick the Country, name the rate what your customers expect to see (VAT or GST), and type a region if you want one printed, such as British Columbia. The form starts on Outside the US when all your airports have an address outside the US. Two things to know: the rate is added on top of the prices you type (it does not include tax already), and invoices are raised in US dollars today.
Raise a taxed invoice#
WebBilling → New invoice. Each line now has a second row: what the line is (Labor, Parts and goods, Shop supplies, Outside service, Freight and shipping, Fees, Aircraft rental, Instruction, or Other) and, once your school has a rate, a Taxable tick.
- The tick starts from your rule for that kind of line, and shows the tax it adds.
- Untick it for an exception, like a part replaced under warranty. Tick it for the opposite exception.
- If your school charges a service fee, its line under the subtotal has its own Taxable tick, which starts from your rule for Fees.
- The tax appears under the subtotal, one row per rate, and the Total is what the customer is charged. If your own Stripe account is set to round tax on each line rather than on the invoice total, Stripe's figure can be a cent different; the invoice records Stripe's.
- Create invoice waits until the total on screen has been priced for exactly the lines you typed. If something changes in between, for example somebody edits a rate, you are asked to check the new total first.
List labor and parts on separate lines. In many states a single line that mixes the two makes the whole amount taxable.
Quantities are whole numbers. For 1.5 hours of labor, put the hours in the description and the amount in the price.
Customers who do not pay tax#
Some customers are exempt: a reseller, a government agency, a charter or ag operator, or the owner of an out-of-state aircraft, depending on your state. Open them in WebPeople, find Sales tax on their Overview, click the pencil, and choose why they are exempt. Add a note naming the certificate you hold, for example ST-101 on file.
From then on, invoices you raise for them carry no sales tax, and print why, for example "Tax exempt: Resale (ST-101 on file)".
What is not taxed#
- Flight bills from close-out. Aircraft rental is taxed in some states, but AerScheduler does not add tax to close-out bills yet. If your state taxes rentals, talk to us before you rely on this.
- Membership dues, join fees, tuition and prepaid packages.
- Invoices raised from the mobile app (iPhone and Android), which does not yet ask what each line is. Their service fee line is not taxed either.
- A charge to a member's account balance, at a school that bills through account balances. AerScheduler refuses a taxed line there rather than post it without its tax: untick Taxable on those lines, including the service fee line if your Fees rule ticks it.
When a rate changes#
Once a rate is on an invoice, only its name can change: its percentage, state, and country are fixed, because an old invoice has to keep saying what it charged and where. To charge a new percentage, archive it and add the new rate, then choose it under What gets taxed again. Invoices you already raised keep the tax they charged. The same goes for exemptions and rules: a change only affects invoices raised after it.
Reports and QuickBooks#
WebReports → Tax collected lists every line in the period with its gross, taxable, exempt, and non-taxable amounts and the tax charged, grouped by rate. It is windowed on the date each invoice was raised, even when you filter to paid invoices. If you file on cash received, use Payments received, which is windowed on the payment date and has a Tax column. Charges posted to members' account balances are not listed.
Revenue reports show revenue before sales tax; the payments and aging reports include it, because it is money the customer paid or owes.
Invoices that carry sales tax are not sent to QuickBooks yet. They wait under Needs attention marked Carries sales tax. Record them in QuickBooks yourself, then choose Handled.
Common questions
- Are flight rentals taxed?
- Close-out bills for flights carry no sales tax. A rental you bill by hand with New invoice, marked Aircraft rental, follows your rules like any other line.
- Why is labor not taxed when parts are?
- Because that is the rule in most states that tax repairs, when the two are on separate lines. Your own rules decide it: choose which kinds of line your rate applies to in Settings, Sales tax.
- How do I stop charging tax to a reseller or an out-of-state owner?
- Open them in People and set Sales tax to exempt, with the reason and the certificate you hold. Their invoices then carry no tax and print why.
- Can I change a rate that is already on invoices?
- Not its percentage: archive it and add the new rate, and old invoices keep the tax they charged. You can still rename it.
- Do taxed invoices go to QuickBooks?
- Not yet. They wait under Needs attention for you to record by hand, then you mark them Handled.
Still stuck on this?
Email support@aerscheduler.com and tell us what you were trying to do. We answer.