Environmental and ecological taxes

Topic overview

Environmental taxes are single rate taxes. Ecological (ECO) taxes are usually not single rate taxes; there are usually different rates depending on what size of container you are selling the taxable product in. These taxes are currently applied to:

• Paint containers
• Pop & beverage containers
• Oil disposal
• Car batteries
• Tires
• Computer disposal

Normally the Tax Table is set up as follows:

• Tax 1 is the State or Provincial tax
• Tax 2 is the Federal tax (GST)
• Tax 3 environment tax
• Tax 4 environment tax
• Tax 5 is an included tax of tax 2
• Tax 6 environment tax
• Tax 7 & 8 are ecological taxes and defined by the inventory item.

In addition to the three environmental taxes applied to the sale of tires, batteries and oil (including oil changes), there are two ECO tax options. The difference with the ECO taxes as compared to the environmental taxes are that the rate or amount is associated with the inventory item record (Inventory Details window - Taxes tab), so each inventory item can have a different rate.

Set up environmental taxes

Environmental taxes 3,4, 6 are considered fixed (F-type) and are set with one rate that applies to all inventory items you select this tax to apply to (Inventory Details window - Taxes tab, check the appropriate tax check box).

Set up ECO taxes 7 & 8

These instructions use the following information as an example:

Tax Code    CONTAINER   DEPOSIT     ECO CHARGE
                 (set as Tax 7) (set as Tax 8)

CA             ALUMINUM CANS 0.05 0.005

G1              GLASS < 460 ML 0.05 0.035

G2              GLASS 460 ML - 1L 0.10 0.035

PT               PLASTIC (PET) 0.10 0.005

1. To set up ECO taxes, select Setup Tools> Setup Wizard> Taxes . The Tax Table window shown in Figure 1 appears. Setting up ECO taxes in the Tax Table allows you to specify the tax rate at different periods in time, so when you edit an old invoice, the system knows what the tax rate was at that time. The system determines if an eco tax is taxable based on the invoice date.
2. Enter the information in Tax 7 and Tax 8. See the set up for the above example in Figure 1 and Figure 2.
   • The size and type of container is detailed using the Tax Zone (area) column of both Tax 7 and Tax 8. This allows the different sizes to be available in a drop-down list on the Inventory Details window - Taxes tab. Note: Because you are using the Tax Zone for this purpose you can not use the Tax Zone (area) to define a physical regions/counties like all the other taxes allow. This means Tax 1- 6 use Tax Zone to define physical regions/counties but Tax 7 & 8 can not.
   • Tax 7 is used to define the various deposit choices and Tax 8 is used to define ECO Charges.

Figure 1: Deposit tax set up as ECO Tax 7

Figure 2: ECO charge set up as ECO Tax 8

3. To select the appropriate ECO tax for each inventory item they apply to, select Inventory and Purchases> Inventory> Edit Item and select the desired item in the Part Find window. The Inventory Details window appears with the selected part details displayed.
4. On the Taxes tab, check Tax 7 and 8 check boxes. The ECO Tax 7 & 8 selection boxes appear.
5. Click the ECO Tax 7 & 8 down arrows and select the specific ECO tax that applies to this item (in this example this relates to the size and type of container the item is sold in).

Figure 3: eco taxes' tax on tax

6. Click [OK] to accept your settings and close the window.

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