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Changing Tax Rates and Date Effective Tax Rates in Dynamics GP

Are you ready for the tax decrease? Most Manitobans are probably aware the Retail Sales Tax (RST), often referred to as Provincial Sales Tax (PST), will be decreasing from 8% to 7% effective July 1st, 2019. In preparation of the change, we’ve included a refresher on how to change the tax percentage for Tax Detail IDs in Dynamics GP as well as information on a feature called ‘Date Effective Tax Rates’.

Changing Tax Rates

To update your Tax Detail IDs, go to: Administration > Setup > Company > Tax Details.

Select any Tax Detail ID affected by the change then enter the new percentage in the ‘Percentage’ field and save your changes. Any new transactions entered using that Tax Detail ID will now calculate taxes with the new percentage.

Changes to Tax Detail rates will not affect transactions that have already been entered and saved in a batch. Should you need to update those transactions, you may do so using a utility in GP. To update those transactions, go to: Administration > Utilities > Company > Regenerate Taxes.

Select a module or update all modules. Available modules include: Sales Order Processing (SOP), Purchase Order Processing (POP), Receivables Management (RM), and Payables Management (PM). You may then insert a restriction on batch ID, if desired, and click the ‘Process’ button. A prompt will appear indicating you may want to back up your database and allowing you to continue or cancel the process. Should you choose to continue, there are two reports available. The first is a ‘Tax Correction Report’ showing the transactions affected by the change along with the new tax amounts. The second is a ‘Tax Correction Exception Report’ showing the transactions that have not been affected by the change.

Date Effective Tax Rates

Dynamics GP 2010 introduced a new feature called ‘Date Effective Tax Rates’. At that time it needed to be installed prior to use, but with GP 2015 R2 it was added to the main dictionary. This feature allows a Tax Detail ID to have multiple tax rates based on a specified date range. Transactions may then use the rate based on the date range using the document date or the posting date.

The Date Effective Tax Rates feature is company specific.  To turn on this feature, go to: Administration > Setup > Company > Company. Click the ‘Options’ button to open the Company Setup Options window and mark the checkbox to ‘Use Date-effective Tax’. You may also change the drop-down option to change the default from document date to posting date.

When this feature is turned on, you will find a new button available in the Tax Detail Maintenance window (Administration > Setup > Company > Tax Details), titled ‘Date Effective Tax Rates’.  Clicking this button opens a window allowing you to specify the tax rate for a specific date range.  Essentially, this window overrides the rate specified in the Tax Detail Maintenance window.  If you do not set up Date Effective Tax Rates, then the transaction will use the rate specified in the Tax Detail Maintenance window.

The screenshot above shows a date range from July 1, 2013, to June 30, 2019, with a rate of 8% so any transactions using this Tax Detail ID in that date range will use the rate of 8% even though the percentage specified in the Tax Detail Maintenance window shows 7%.  Any transactions using this Tax Detail ID with a date on or after July 1, 2019, will use the rate of 7%.

Just a reminder that if you have any tax rates, calculations, or labels hard-coded on reports related to affected tax rates, those will need to be updated.

Should you have any questions or would like Dynamics GP assistance, please contact Prophet Business Group’s GP support team or give us a call at 204-982-9890.

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