BillQuick allows for project-level tax rate (MST and MET) and also time entry-level taxes (Tax1, Tax2 and Tax3). You can combine them to get a tax-on-tax result or simply use the MST for a single tax rate.
Tax on Services (Time Entries):
There are two types of taxes that apply to services:
- Taxes on individual time entries.
- Tax on total service amount at the time of billing.
Taxes on Individual Time Entries: Tax1, Tax2, and Tax3 apply on individual time entries. These can have different values for different time entries. For example, you can apply Tax1, Tax2 and Tax3 as 3%, 2% and 5% respectively for one time entry and 6%, 1%, and 3% respectively for another time entry.
The company wide default values for Tax1, Tax2 and Tax3 can be set on the More tab of System Settings screen. These values are brought forward in Activity Codes screen, when you create a new Activity. These rates are in turn brought forward in Time Entry screen, when you make a new Time Entry, and can be edited there. Thus letting you apply different tax rates for different Time Entries.
It is important to know that Tax1, Tax2 and Tax3 are summed before applied. e.g. If your taxes are 5%, 3% and 2%, BillQuick will treat it as 10% tax. However, you do have the capability to report on each level separately.
Tax on Total Service Amount at the Time of Billing (MST): This tax is called Main Service Tax (MST). It applies on the Service Amount that you are going to Bill to the Client. Service Amount is the summation of the service amounts of Billable Time entries. The Billable amount of a Time Entry includes the individual Taxes (Tax 1, 2 and 3). Thus Main Service Tax can be a Tax on Tax.
MST is defined to be Project specific. Different Projects can have different values for MST.
Company wide value for Main Service Tax can be set in the Company Screen. A new Client inherits these values from the company screen. A new Project then pulls in these values from the Client. The value of MST from Project screen is ultimately used for billing.
To change the value of MST for all Projects in one go, you need to set the new value on the More Tab of System settings screen and click the Apply button. This changes the MST value for all Projects.