Sage 50 Sales Tax Not Calculating

Hey! Is it frustrating for you to deal with the “Sage 50 sales tax not calculating” error? Don’t panic if your answer is  YES just because here’s the solution. This blog is specially written for the users who really want to fix this error as soon as possible. 

Sage 50 customer and sales tab include a summary of customer information access to recently used customer reports and an overview of your company’s aged receivables. Along with this, the Navigation Centre shows the flow of customer-related tasks and takes you where you need to go to perform those tasks. 

Let’s find out the causes of happening “Sage 50 sales tax not calculating” error:

  • If the customer or Vendor Tax record is set up as exempt Yes.
  • If the line item total is entered in Price instead of Amount when inventory is not being used. 
  • If the taxes are included in the price.
  • If the inventory/ service tax record is set up as exempt Yes. 

What are the resolutions of the “Sage 50 sales tax not calculating” error?

Walkthrough each resolution one by one to get over the error within a while.

Solution:1 Taxes are included in the Price

  1.  To ensure that the tax code is not included in Price, follow the linked article in Related Resources. 
  2. By design, when the sales tax code calculates the sales taxes included in the price, the tax amount will not show on the sales invoice screen. 
    • While in the sales/ purchase invoice, you can verify that the tax amounts are going to the appropriate accounts by doing a Ctrl + J to view the journal entry. 

Solution:2 Customer / Vendor record has tax-exempt on Yes

  • Navigate to the Customer/ Vendor record.
  • In the taxes tab, switch Yes to No under Tax Exempt.
  • Select Save and Close.

Solution: 3 Inventory or Service record has tax-exempt on Yes

  • Hover over the Inventory/ Service record.
  • Go Yes to No under Tax Exempt under the Taxes Tab. 
  • Hit Save and Close. 

Solution: 4 No Tax Code Assigned to the Customer/ Vendor

  • Move to the Customer/ Vendor record.
  • Click the Taxes tab.
  • Select a tax code from the Choose the tax code… drop-down list.
  • Press Save and Close. 

Solution: 5 Price Being Entered Instead of Amount

  • Enter the total for the line item into the Amount field rather than the Price field if not using inventory items.
  • Once you are done with leaving the Amount field, you need to press TAB or select a different field, the sales tax amount will be calculated. 

Solution: 6 Taxes option is set to exempt no

  • First, locate to Setup, Settings.
  • Select Company, Sales Taxes, tax codes.
  • Confirm the Exempt from this tax: No


Hopefully, this write-up will prove helpful for you but if in case, the issue has still persisted and you are unable to resolve it alone, feel free to get in touch with the Sage 50 professional experts. They are always available to help you with instant and cutting-edge solutions. So, don’t worry if your system doesn’t allow you to proceed ahead as we are here to make you happy with the most satisfactory results. 

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Frequently Asked Questions (FAQs)

  1. How can I calculate sales tax? 

    It’s really important to know how much items are going to cost before you purchase them. It’s not as easy as just looking at the price tag: sales tax must be calculated in order to determine the total cost. Sales tax rates are increasing, which makes the tax impact on a purchase more significant. You can use these tips to learn how to calculate sales tax on your retail purchases.

    You have to multiply the cost of an item or service by the sales tax in order to find out the total cost. The equation looks like this: Item or service cost x sales tax (In decimal form)= total sales tax. Next, add the total sales tax to the Item or service cost to get your total cost. 

  2. What to do if I want to add sales tax to Sage 50?

    To enter sales tax on Sage 50, you need to perform on the steps listed below:

    1. If you are reluctant to set up sales tax authorities and set up sales tax codes in Sage 50, click “Maintain Sales Taxes” from the Menu Bar to open the “Set Up Sales Taxes” window.
    2. Choose the “Set up a new sales tax” option to set up a new sales tax in this window.
    3. Then press the Next button.
    4. In the next screen, you need to enter the total rate charged for the sales tax into the first available field. If you base your sales tax on a formula, leave the percentage field blank. 
    5. After that, use the drop-down to select the number of individual agencies that make up the total tax collected.
    6. Again hit the Next button.
    7. Once you have opened the next screen, you need to set up the taxing authorities for your sales tax by entering the information for each taxing authority you selected on the previous screen. 
    8. Now enter which account you use to track the collected taxes and how much of the total tax rate each vendor collects
    9. You have an option to use the drop-down in the middle of the screen to choose the “by formula” option if you have to enter a sales tax rate based on a formula versus a flat percentage.
     10. Once you are done with the above step, click the Next button to continue.
     11. Name your sales tax code in the last screen after entering your taxing authorities.
     12. If needed for your state, select whether to charge tax on shipping.
     13. Later, hit the “Finish” button to finish creating the sales tax.
    14. Select “Maintain Sales Taxes” from the Menu Bar to open the “Set Up Sales Taxes” window to edit, delete or review the sales tax codes and sales tax agencies. 
     15. Choose the “Edit an existing sales tax or sales tax agency” option to edit either the tax agency information or the associated code. 
     16. Press the Next button to proceed. 
     17. Edit either the code or the agencies in the following screens by changing the information and then clicking the Next button.
     18. Lastly, press the “Finish” button.

  3. Is it possible to change my tax code on Sage 50? If yes then how?

    If you really want to change your tax code on Sage 50, you have to follow the steps that are jotted below:

    1. Firstly, select Settings on the menu bar, click configuration and then hit Tax Codes.
    2. Choose the required tax code and hit Edit.
    3. Now you need to complete the Edit Tax Code window as follows:
    Type the required percentage. For example, to set up a 5% VAT rate, enter 5.00 in this box.
    If you choose the EC Code check box, the Rate box becomes inactive. 
    Include in VAT return- Click on this check box in order to include transactions with this tax code in the VAT return.
    Reverse Charge- This should only be used for the sale or purchase of items that fall under the remit of carousel fraud, for instance, mobile phones. It must not be used for standard reverse charge transactions.
    Flat Rate Capital Asset- Choose this option if you are on a Flat Rate VAT scheme and you want to use the tax code for capital assets.
    Enable EC code or EC code- Select this check box to flag your tax code as an EC tax code and then from the drop-down lists, choose the relevant options. 
    Link To- 
    This option is only available for EC purchase tax codes. 
    If this tax code should record notional VAT, select the required tax code that you want to link to. Notional VAT is calculated based on the rate of the code you link to. 
    Description- Enter a description for the tax code. 
    4. Press OK then click Apply.
    5. Select Close then if prompted to save the changes hit No.

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