At times a contractor needs to pay different tax amounts on different material items for a job. Within Spectrum you can code jobs so that the taxable status can be determined by the cost type. For example, if materials are taxable but labor is tax exempt, cost type is used to automatically determine the taxability of each A/P invoice line. The tax table also allows overrides by phase as well as cost type.

Normally, there is a relationship between the A/P sales tax setup and the A/R setup. For example, in some states the contractor has the option of paying sales tax at the time of purchase or charging tax at the time of sale. If tax is paid at the time of purchase, then no tax is charged at the time of sale; otherwise, no tax is paid at purchase and it is charged at time of sale. Because of this relationship, it makes sense for A/R and A/P sales tax issues to be handled in one table. This allows you to set up the table to establish the correct relationship for the job.