Here is our dilemma. In Texas, we are required to charge sales tax on materials in Service Titan for Residential customers and sales tax on total ticket for Commercial customers. We have a resale certificate with our suppliers.
What is the best way to set this up in ST. We currently have our taxes setup as follows: Commercial Labor 8.25%, Residential Labor 0%, and Residential Material @ 8.25%.
The following are the problems we are having with this tax setting:
Example: We sell a flat rate task (includes commonly used materials that are taxed) to a residential customer for a water heater installation, we present an estimate, customer approves and we perform the work. When we invoice the customer and need to add additional non-chargeable materials, additional taxes are added to the invoice even though we did not charge for the material.
1) How do I capture job costs without causing confusion to our technicians in the field for non-chargeable material? To prevent additional taxes added after the invoice is approved, we are having to delete the cost of the non-chargeable material so the system doesn't calculate additional taxes.
2) The invoice will show a "material tax" even though our materials are not visible on the invoice. In some cases, the material tax is extremely low. Is there a way to not display the tax on a residential customers invoice and only display taxes on commercial customer invoices?
Any Texas customers, if you have a solution, we are all ears. Thank you.
We are located in Texas and it was a struggle to set up our sales tax processes. I don't know if I'll be too much help since we do time + materials billing except for large contract jobs, but this is our process now:
1. We use three tax zones - Residential Sales Tax (taxes materials only), Commercial Sales Tax (taxes labor + materials), No Sales Tax (for tax exempt customers)
2. For flat rate projects, we bill the customer using a placeholder task called CONSTRUCTION with their flat rate price. Then, we add an adjustment invoice with all of the materials we actually used (at our cost, not at regular retail price). We decrease the amount of the CONSTRUCTION tax by the amount of the materials + sales tax owed on them.
It sounds like you have the setting that allows you to charge tax on non-chargeable materials. There is a config that will ONLY charge tax on chargeable materials. With that on, when you add non-chargeable materials to the invoice, it will not affect the tax charged. Would that solve your problem?
Please note that if we turn it on the following will apply:
Right now the following applies to you: