How to interpret A/R credit or debit memo sales tax reporting distribution

When a debit or credit memo changes the taxable amount on an invoice, Sage BusinessWorks displays information on amounts allocated to taxable and nontaxable sales.

When all or a portion of a credit or debit memo is distributed to sales tax, the message, "SALES TAX REPORTING HAS CHANGED" displays. After closing the 'Adjustment Distribution' screen, click 'Tax Reporting' to view the taxable and nontaxable sales amount distribution.

Notes:

• Since a credit memo reduces an invoice balance, a positive number on this screen will be subtracted and a negative number will be added to the 'Taxable' and 'Non-taxable' fields.
• If no portion of the adjustment is distributed to tax, Sage BusinessWorks will assume that the entire amount is non-taxable.
• If a portion is distributed to sales tax, Sage BusinessWorks will calculate the taxable sales based on the amount of sales tax credit