Tax Entities

Tax Entities define the tax rates and rules your business applies to purchases and sales. Each entity stores the tax rate, which accounts to accrue taxes into, the effective dates, and which resource types the tax applies to. Once set up, tax entities can be selected when creating invoices, purchase orders, and other transactions.

Where to Find Tax Entities

Navigate to Settings → Business Unit Settings → Tax Entities tab.

Navigation path: Dashboard → Settings → Business Unit Settings → Tax Entities

The Tax Entities List

Tax Entities list

What you see on this screen

#	Element	Description
1	Settings Sidebar	The left sidebar groups all Business Unit Settings. Tax Entities is highlighted under Financial Setup.
2	Page Header	Confirms you are on Tax Entities.
3	Create Tax Entity	Opens the creation dialog.
4	Search Bar	Filter by name or Display ID.
5	Column Headers	Sort and filter by any column.

Creating a Tax Entity

Click + Create Tax Entity to open the dialog.

Create Tax Entity dialog

Form Fields

Field	Required	Description
Display ID	Yes	A unique numeric identifier for this tax entity.
Tax Entity Name	Yes	Descriptive name (e.g., CO Sales Tax, Denver City Tax).
Status	Yes	Active or Inactive.
Tax Account Number	No	An internal reference number for this tax authority.
Description	No	A brief description of this tax entity.
Tax Type	No	Sales (applied on sales), Purchase (applied on purchases), or Both.
Resource Type	No	Which resource types this tax applies to: All, Labor, Material, Other, Subcontract, Equipment, or Assembly.
Effective Date	No	The date this tax rate takes effect.
Expiration Date	No	The date this tax rate expires. Leave blank if it does not expire.
Sales Tax Rate (%)	No	The percentage applied to taxable sales (e.g., `8.5` for 8.5%). Supports up to 5 decimal places.
Use Tax Rate (%)	No	The percentage applied for use tax on purchases.
Default Entity	No	Check to make this the default tax entity for new transactions.
Use Tax Accrual Account	Yes	The Chart of Accounts account where use tax is accrued.
Sales Tax Accrual Account	Yes	The Chart of Accounts account where sales tax is accrued.
Contact Details	No	Telephone, website, and address fields for the tax authority (for reference).

Example: Setting Up a State Sales Tax

Field	Value
Display ID	`1`
Tax Entity Name	`CO State Sales Tax`
Status	Active
Tax Type	`Sales`
Sales Tax Rate (%)	`2.9`
Sales Tax Accrual Account	`21000 - Sales Tax Payable`
Default Entity	✓

Editing a Tax Entity

Click the pencil icon in the Actions column. Make your changes and click Update Tax Entity.

Note: Changing a tax rate on an active entity affects all future transactions. Past transactions retain the rate that was in place when they were created.

Tips & Best Practices

Create separate tax entities for state, county, and city taxes if your jurisdiction has layered tax rates.
Use Effective Date and Expiration Date when a rate changes — create a new entity for the new rate rather than editing the existing one, to preserve historical accuracy.
Set your most commonly used tax entity as Default to speed up data entry.