This section guides the user through the menu options that are available under the Taxing menu.
Some states allow delivery cost to be exempted from subscriber taxing (see Trans Exclusion for more information). However, the state may not allow the full delivery cost to be exempted if the cost of delivery exceeds the cost to the subscriber. For example, if a subscriber on a promo rate pays 10.00 for 6 weeks, and the carrier is paid 11.00 for delivery during that same time period, the entire 11.00 delivery cost may not be exempted. Only the amount the subscriber paid (10.00 in this case) may be exempted.
The Tax Exclusion report lists subscribers whose subscription cost is below the delivery cost for a given date range. It also creates GL entries to debit Subscriber Revenue and credit the Earned Tax account for the difference between the delivery cost and the subscriber cost. In the example above, 11.00 would have been exempted when Trans Exclusion was run; Tax Exclusion will reverse out 11.00 - 10.00, or 1.00 of that delivery cost.
Only subscribers with tax authorities flagged for transportation exclusion (the Excl Trans Cost field in Tax Authority Publication setup—see Tax Authority Publication in the Setup Manual) will be included in the report.
Note: The Tax Exclusion Report is part of the Tran Cost Exclusion add-on feature that requires a license fee. Contact the Naviga Support Center if you wish to purchase this add-on.
Select Tax Exclusion from the Taxing menu to display the Tax Exclusion Report window.
Click Add and complete the following fields.
PRODUCT
setup
Enter the product for which to calculate taxing exclusions, or enter “*” to multi-select products.
START DATE, END DATE
date
Enter a date range for the report. The report will determine whether subscribers qualify for tax exclusion based on this date range.
SORT ORDER
predefined
Indicate whether the report should sort by subscriber ID within each area, region, zone, or district. Or, enter all if the report should sort by subscriber ID only.
UPDATE GL
yes/no
SHOW ALL SUBSCRIBERS
yes/no
When unchecked, only subscribers that have a tax exclusion qualification will be included in the report. When checked, all subscribers will be included. If this box is checked, the Update GL box is disabled.
Click OK and then Continue to create the report. GL entries will also be made if Update GL was set to “y”—see GL entries for taxing for more information.
Note: This menu option is not available in the Cloud environment.
The Business Activity Statement (BAS) is a form submitted to the Australian Taxation Office to report tax obligations. The BAS Reconciliation report exports charge records associated with BAS categories, which is helpful in completing this form. It is run weekly to calculate taxes associated with agent activity and compared to the actual tax. Any accounts that are tax exempt, as well accounts whose tax status has changed during the reporting period, are listed. You can run a detailed or summary version of the report.
Select BAS Reconciliation from the Taxing menu to display the BAS Reconciliation window.
Click Add and complete the following fields.
PRODUCT
setup
Select the product for which to export charge records, or type “*” and multi-select.
START DATE, END DATE
date
Enter a date range for the export.
FILE FORMAT
setup
Select the file map to use for this report. A file map must be set up previously.
FILE NAME
open
You can accept the default file name or modify it.
FILE OPTION
predefined
Select append (add to an existing file with the same name) or replace (replace the existing file).
Click OK and then Continue to export the charge records.
Some states require taxes to be paid at the time of the delivery, rather than payment. This means that tax figures reported at the end of a fiscal period must include tax only on papers that have been delivered. The Tax Liability Report can assist in reporting these “earned” taxes. It lists each subscriber’s earned tax and remaining tax liability (unearned tax) for the reporting period, in a manner similar to the Unearned Revenue Report. Tax exempt subscribers can also be listed. If run in update mode, earned taxes will be recalculated, and if Create GL is selected, GL entries will be made.
In order to “earn” taxes, a tax authority must be set up to remit taxes on delivery—see Tax Authority Publication in the Setup Manual for more information.
Select Tax Liability from the Taxing menu to display the Tax Liability window.
Click Add and complete the following fields.
ALL ACCOUNTS
yes/no
Indicate whether earned tax should be reported and updated for all subscribers of a publication. If you do not select this checkbox, you specify subscribers to include based on product and subscription ID ranges entered in the Account Ranges Entry window (which opens after the Tax Liability fields have been entered).
If only certain accounts should be included, leave this box unchecked and click the Account Ranges Entry button to the right of the field to manually specify the subscribers to be included.
PRODUCT
setup
If All Accounts is selected, enter the product for which to run the report.
START DATE, END DATE
date
Enter a date range for the report. The report lists taxes earned within this date range. If the date range includes unpublished days, the report will estimate the (unearned) tax amount for the undelivered days.
REPORT TYPE
predefined
Indicate whether the report should list earned tax for individual subscribers (“Detail”) or only totals for distribution methods and publication (“Summary”).
UPDATE
yes/no
Indicate whether earned tax information should be updated (the updated earned tax becomes the “Prior Tax Liability” the next time you compile the report). If earned taxes have not been updated through the day prior to the start date, “Prior Tax Liability” will be zero.
CREATE GL
yes/no
PRINT EXEMPT LIST
yes/no
Indicate whether subscribers that are tax exempt should be listed at the end of the report.
Click OK and then Continue to update earned tax information and create the report. A sample report is shown below, and the following table describes the report columns.
Account, Name
The subscription ID and name are printed in these columns.
Entity
The subscriber’s tax authority prints here. If the subscriber is taxed under more than one tax authority, a separate line will be printed for each tax authority.
Prior Tax Liability
The subscriber’s previous unearned tax (i.e., the tax amount that has not been delivered yet) appears in this column. Note that the prior tax liability will be zero unless the Tax Liability report was previously run in update mode with an end date one day before the start date of the current report.
Payments
If the subscriber has made a payment during this period, the taxes deducted from the payment will be listed here. This column also includes tax for cash payment adjustments, NSF payments and canceled payments.
Transaction Activity
If the subscriber’s balance was adjusted by move or transfer transactions during this period, the tax impact will be listed here.
Grace
If the subscriber had grace owed or grace written off during this period, the tax on the grace will be listed here.
Refund
If the subscriber had a refund or refund written off during this period, the tax on the refund amount will be listed here.
Earned Tax
The “earned tax” (tax on papers delivered) for this period will appear in this column. This will be:
Prior Tax Liability + Payment Tax + Transaction Activity Tax - Refund Tax + Grace Tax - Current Tax
Current Tax Liability
The tax collected during this period (from payments, etc.) but not earned appears in this column. This is calculated by multiplying the number of remaining copies by the average tax copy rate or (if the subscriber rate varies by day) by the copy rates by day.
The diagram below illustrates the GL entries for taxing. Tax entries are made for a payment (or transfer in), for grace owed, and during grace writeoff:
Payment or transfer in. Unless a tax authority remits on delivery, the only GL entries will occur during Payment Processing, when Cash in Bank is debited and Tax Collection is credited. If the tax authority does remit on delivery, tax monies will move from Tax Collection to Earned Tax when the Tax Liability report is run. If the tax authority allows delivery costs to be exempted, that amount will move from Earned Tax to Subscriber Revenue; this happens when the Transportation Exclusion report is run. However, if the cost of the subscription is less than the delivery fee, the difference must be posted back to Tax Collection (when the Tax Exclusion report is run).
Grace owed. Grace owed will be taxed only if the tax authority remits on delivery. When the grace owed is created (during Transaction Processing or when the Grace Due report is run), Subscriber AR will be debited and Tax Collection will be credited for the tax amount. This tax will be earned the next time the Tax Liability report is run. As with a payment, the delivery cost can be exempted from the tax. If a payment then arrives and the grace owed is paid, there will be GL entries only for the payment portion—the tax has already been recognized.
Grace writeoff. If a grace owed transaction is written off, any tax (minus any transportation exclusion) will move from Earned Tax to Subscriber AR. The transportation exclusion, if any, will move from Subscriber Revenue to Subscriber AR.
The Tax Export option generates an export file in /dti/exchange/cm that contains payments and refunds for a selected product and date range. This export file is used to prepare tax invoices and adjustment notes to send to subscribers.
The Tax Export uses file mapping (usage: “SubscrTaxExpt”). You must have a file map created before you can use this option.
Select Tax Export from the Taxing menu to display the Subscriber Tax Export window.
Click Add and complete the following fields.
PRODUCT
setup
Select the product for which to run the export, or enter “*” and multi-select.
START DATE, END DATE
date
Enter a date range for the export.
OUTPUT
predefined
Select payments, refunds, or both to include in the export.
FILE FORMAT
setup
Select the file map to use for this report. A file map must be set up previously.
FILE NAME
open
You can accept the default file name or modify it.
FILE OPTION
predefined
Select append (add to an existing file with the same name) or replace (replace the existing file).
Click OK and then Continue to run the export.
The Trans Cost Remit Tax Report calculates the tax on the transportation (delivery) cost and the tax that must be remitted to the state. The transportation cost is the cost of delivering the paper (the credit to the carrier) and in some states this may be excluded from tax. This report is available only if the Remit On Payment add-on has been purchased.
Note:
This report is appropriate for states, such as Florida, that require taxes to be remitted on payment rather than on delivery. For remit-on-delivery states, the Tax Liability Report, above, should be run instead.
A subsidy amount can be added to the transportation cost, based on the Business Rule— “What is the daily subsidy amount which should be added to the remit on payment trans cost calculation?” (Transportation Cost section) or, if defined at the route level, the Route Subsidy field in the Route Setup Utility.
In addition to reporting taxes, the Trans Cost Remit Tax Report updates the General Ledger with tax revenue amounts; the Tax Collection account is debited and Subscriber Revenue credited for taxes that are excluded due to transportation cost. Note that this report does not list mail subscribers.
Select Trans Cost Remit Tax from the Taxing menu to display the Trans Cost Remit Tax window.
Click Add and complete the following fields.
PRODUCT
setup
Enter the product for which to report tax exclusion and remittance. Enter “*” to multi-select products.
START DATE, END DATE
date
Enter the date range for running the Trans Cost Remit Tax report. The report lists taxes on papers delivered within this date range.
CHECK SUSPENDED PMTS
yes/no
Select this checkbox if you want the process to check for suspended payment batches. If a suspended payment batch is found for the product and date range, the message “Found suspended payment batch: <batch ID>” will be displayed.
CHECK UNPROC TRANS
yes/no
Select this checkbox if you want the process to check for unprocessed transactions.
If an unprocessed transaction is found for the product and date range, the message “Found an unprocessed <tran type ID> for <subscriber ID> on <tran date>”.
UPDATE GL
yes/no
Indicate whether the General Ledger should be updated with tax revenue amounts as part of the report process.
Click OK and then Continue to create the report and update the GL.
The formula used by Circulation to calculate the remit tax (tax that must be paid to the government) and tax revenue (tax on transportation cost, which can be kept by the newspaper as revenue) is shown below.
First, the transportation cost is calculated. This is the amount credited to the carrier for delivering a subscription for the rate term period (in the case of the renewal notice export) or the reporting period (in the case of the Trans Cost Remit Tax Report), plus the subsidy amount from Business Rules.
transportation cost = (account copy rate * days) + (subsidy copy rate * days)
If the account credit is greater than the subscriber rate, the transportation cost will instead be the difference between the subscriber copy rate and the minimum copy rate, times the delivery days in the period.
transportation cost = (sub copy rate * days) - (minimum copy rate * days)
The transportation cost is then used to calculate the tax revenue. Because the tax is already included in the transportation cost, it cannot be simply multiplied by the tax percentage to determine the revenue tax. For each tax authority that allows transportation cost to be excluded:
revenue tax = (transportation cost * tax authority percentage) / (1 + total tax percentage)
The revenue taxes for all tax authorities are then added together for the renewal notice export (they are listed separately on the report). The remit tax is calculated based on the revenue tax:
remit tax = total tax - revenue tax
As an illustration of how the revenue and remit taxes would be calculated, let’s look at the following example:
Transportation cost for the period was 20.00
Tax authority Florida allows transportation cost exclusion. The tax is 4%.
Tax authority City also allows transportation exclusion. The City tax is 2%.
The total tax taken out for the period was 1.80.
The revenue tax calculation for Florida would be: (20 * 0.04) / (1 + 0.06) = 0.75
The revenue tax calculation for City would be: (20 * 0.02) / (1 + 0.06) = 0.37
The total revenue tax would be 1.13, and the remit tax would be 1.80 - 1.12, or 0.68.
Indicate whether GL entries should be made as part of the report process. See . If this box is checked, the Show All Subscribers box is disabled.
If earned tax information is being updated, indicate whether earned General Ledger entries should be posted. See for more information on taxing GL entries. Note: The first time you run the Tax Liability report in update mode, do not select this checkbox. Liability records need to already exist in order to calculate the GL entries.
