Tax Management
Tax management in DiverDash automates the calculation, collection, and reporting of sales taxes for your dive center. Set up tax rates once and let the system handle tax calculations on all sales and expenses automatically.
What You'll Learn
How to set up tax rates and jurisdictions for your location
How to configure automatic tax calculation on sales and expenses
How to manage tax exemptions for customers
How to generate tax reports for compliance and filing
Need help configuring how taxes are calculated? See Tax Calculation & Configuration for detailed guidance on tax-inclusive vs tax-exclusive pricing and invoice tax calculation.
Before You Start
Make sure you have:
Administrator permissions to manage tax settings
Tax registration information for your business
Knowledge of local tax rates and requirements
Chart of Accounts set up with tax liability accounts
Understanding of your tax obligations (consult an accountant if needed)
Understanding Tax Management
What Tax Management Controls
Tax management in DiverDash handles:
Automatic Tax Calculation: Applies correct tax rates to sales and expenses
Tax Collection: Records tax amounts collected from customers
Tax Liability Tracking: Maintains records of taxes owed to authorities
Tax Reporting: Generates reports for tax filing and compliance
Tax Exemptions: Manages customers exempt from certain taxes
Tax Types Supported
Sales Tax: Tax collected on goods and services sold to customers VAT (Value Added Tax): European-style tax on value added at each stage GST (Goods and Services Tax): Tax on most goods and services Service Tax: Specific tax on service-based transactions Custom Tax Types: Create additional tax types as needed
Accessing Tax Settings
Step 1: Navigate to Tax Management
Go to Settings in the main menu
Click Company
Select the Tax tab
The tax management interface opens with tabs: Tax Rates, Jurisdictions, Settings, Tax Reports
Step 2: Understanding Tax Settings Layout
Company Tax Settings: Default tax rates and liability accounts Tax Rates: Individual tax rates and their details Tax Jurisdictions: Geographic areas with specific tax rules Tax Exemptions: Customers exempt from certain taxes
Setting Up Company Tax Defaults
Step 1: Configure Default Tax Settings
Default Tax Liability Account:
Select the account where collected taxes are recorded
Usually a liability account like "Sales Tax Payable"
Must be set up in your Chart of Accounts first
Required for automatic tax posting
Default Sales Tax Rate:
Select the tax rate applied to customer sales by default
Can be overridden on individual transactions
Applied to course fees, equipment rentals, retail sales
Leave blank if no default rate applies
Default Expense Tax Rate:
Select the tax rate for business purchases
Applied when recording business expenses
May be different from sales tax rate
Used for tax recovery calculations if applicable
Prices Entered With Tax:
Toggle whether your prices include tax or exclude tax
With Tax: Prices include tax, system calculates base amount
Without Tax: Prices exclude tax, system adds tax on top
Affects how tax calculations are performed
Step 2: Save Default Settings
Review all default settings for accuracy
Click Save Tax Settings
Settings apply to new transactions going forward
Existing transactions maintain their original tax calculations
Creating Tax Rates
Step 1: Add a New Tax Rate
In the Tax Rates section, click Add Tax Rate
The tax rate creation form will open
Complete all required fields
Save the new tax rate
Step 2: Configure Tax Rate Details
Tax Rate Name (Required)
Enter descriptive name (e.g., "State Sales Tax", "City Tax")
Use clear names that identify the tax purpose
Include jurisdiction if you have multiple rates
Tax Rate Percentage (Required)
Enter the tax rate as a percentage (e.g., 7.25 for 7.25%)
Use decimal places for precise rates
Cannot be negative
Tax Type (Required)
Select from: Sales, VAT, GST, Service, or Custom
Determines how the tax is categorized in reports
Choose the type that matches your local requirements
Tax Category (Required)
Select: Goods, Services, Rentals, or All
Determines what types of transactions this rate applies to
Can create different rates for different categories
Jurisdiction (Optional)
Select the geographic area this rate applies to
Helps organize rates by location
Useful for multi-location businesses
Effective Date (Required)
Date when this tax rate becomes active
Cannot be in the past for new rates
System uses this date to determine when to apply the rate
Expiry Date (Optional)
Date when this tax rate expires
Leave blank for rates that don't expire
System automatically stops using expired rates
Active Status
Toggle to activate or deactivate the rate
Inactive rates don't appear in transaction forms
Can reactivate rates as needed
Step 3: Save the Tax Rate
Review all information for accuracy
Click Save Tax Rate
Rate becomes available for use in transactions
Can be set as default rate in company settings
Managing Tax Jurisdictions
Creating Tax Jurisdictions
When to Create Jurisdictions:
Multiple business locations with different tax rates
Different tax rules for different geographic areas
Complex tax structures with overlapping authorities
To Create a Jurisdiction:
Click Add Jurisdiction in the Tax Jurisdictions section
Name: Enter jurisdiction name (e.g., "California", "City of Los Angeles")
Country Code: Enter country code (e.g., "US", "CA", "GB")
Region Code: Enter state/province code (e.g., "CA", "ON", "NSW")
Tax Authority: Name of the tax collection agency
Reporting Currency: Currency for tax reporting
Click Save Jurisdiction
Linking Tax Rates to Jurisdictions
Edit an existing tax rate
Select the appropriate jurisdiction from the dropdown
Save the tax rate
Rate is now associated with that jurisdiction
Handling Tax Exemptions
Understanding Tax Exemptions
Who Qualifies for Exemptions:
Non-profit organizations
Government entities
Resellers with valid certificates
International customers (depending on local laws)
Educational institutions
Creating Tax Exemptions
To Add a Tax Exemption:
Go to Clients and select the customer
In the customer profile, find Tax Information
Click Add Tax Exemption
Tax Rate: Select which tax the exemption applies to
Exemption Certificate: Enter certificate number
Valid From: Start date of exemption
Valid Until: End date (optional)
Notes: Additional information about the exemption
Click Save Exemption
Managing Exemption Certificates
Documentation Requirements:
Keep copies of exemption certificates
Verify certificate validity before applying exemptions
Update expiration dates as needed
Remove expired exemptions
Automatic Application:
System automatically applies exemptions during checkout
Exemptions appear on invoices and receipts
Tax reports show exempt transactions separately
Tax Calculation in Practice
How Tax Calculation Works
For Sales Transactions:
Customer selects items (courses, rentals, retail)
System identifies applicable tax rates
Checks for customer tax exemptions
Calculates tax based on company settings
Displays tax amount to customer
Records tax liability when payment is processed
For Expense Transactions:
Staff enters business expense
Selects whether expense is taxable
System applies default expense tax rate
Calculates tax amount
Records tax for potential recovery
Posts to appropriate tax accounts
Tax on Different Transaction Types
Course Enrollments:
Subject to sales tax in most jurisdictions
Tax calculated on course fees
Applied at time of enrollment or payment
Exemptions honored for qualifying customers
Equipment Rentals:
Usually subject to sales tax
Tax calculated on rental fees
May have different rates than course sales
Duration of rental may affect tax treatment
Retail Sales:
Subject to sales tax on goods sold
Tax calculated on sale price
May have different rates for different product types
Reseller exemptions commonly apply
Business Expenses:
Tax paid on business purchases
May be recoverable depending on business structure
Recorded for tax reporting purposes
Different rates may apply than sales tax
Tax Reporting
Generating Tax Reports
Open Settings → Company → Tax → Tax Reports and choose a report:
Tax Liability Report:
Select report and date range
Optionally filter by tax rate
Generate taxes collected and owed
Tax Exemption Report:
Select date range
Optionally filter by customer or tax rate
Shows exempt transactions for the period
Tax Summary Report:
Select reporting period
Shows total taxes by rate and category
Useful for tax filing preparation
Understanding Tax Reports
Tax Liability Report Shows:
Total tax collected by rate
Tax collected by category (goods, services, rentals)
Exempt transactions and amounts
Net tax liability owed
Key Report Elements:
Gross Sales: Total sales before exemptions
Exempt Sales: Sales not subject to tax
Taxable Sales: Sales subject to tax
Tax Collected: Total tax amount collected
Tax Rate: Effective tax rate for the period
Preparing for Tax Filing
Monthly Preparation:
Generate tax liability report for the month
Verify all transactions are properly categorized
Check that exemptions are properly documented
Review any unusual transactions
Reconcile with bank deposits
Quarterly/Annual Preparation:
Generate reports for the entire period
Compare with previous periods for accuracy
Ensure all tax payments are recorded
Prepare supporting documentation
Consult with accountant or tax professional
Troubleshooting Tax Issues
Tax Not Calculating Correctly
Problem: Tax amounts don't match expectations
Solutions:
Check default tax rate settings
Verify "prices entered with tax" setting
Ensure tax rates are active and current
Check for customer exemptions
Verify transaction dates fall within tax rate effective periods
Missing Tax on Transactions
Problem: No tax calculated on taxable transactions
Solutions:
Ensure default tax rates are set
Check that tax rates are marked as active
Verify transaction categories match tax rate categories
Check customer exemption status
Ensure tax liability account is configured
Incorrect Tax Reports
Problem: Tax reports show unexpected amounts
Solutions:
Verify date ranges for reports
Check that all transactions are properly categorized
Ensure exemptions are correctly applied
Review tax rate changes during the period
Reconcile with transaction details
Tax Rate Changes
Problem: Need to change tax rates mid-period
Solutions:
Create new tax rate with new effective date
Set expiry date on old tax rate
Update default tax rate settings if needed
Communicate changes to staff
Update any automated processes
Best Practices
Tax Rate Management
Keep Rates Current:
Monitor tax rate changes in your jurisdiction
Update rates before effective dates
Set expiry dates for temporary rates
Test new rates before they go live
Organize Rates Clearly:
Use descriptive names for tax rates
Group rates by jurisdiction or type
Document the purpose of each rate
Archive old rates rather than deleting them
Compliance and Documentation
Maintain Records:
Keep all tax exemption certificates
Document tax rate changes and reasons
Maintain audit trail for tax calculations
Store tax reports for required retention periods
Regular Reviews:
Review tax settings monthly
Verify exemption certificates annually
Check for tax law changes quarterly
Reconcile tax reports with filings
Staff Training
Train Staff On:
How to identify taxable vs. exempt transactions
When to apply exemptions
How to handle tax questions from customers
Proper documentation requirements
Integration with Other Features
Payment Processing
Automatic Tax Handling:
Tax calculated during payment processing
Tax amounts included in payment totals
Tax liability recorded automatically
Customer receipts show tax breakdown
Financial Reporting
Tax in Financial Reports:
Tax liability appears on balance sheet
Tax collected shows as liability, not income
Tax paid on expenses may show as asset (if recoverable)
Income statements show sales net of tax
Course and Equipment Management
Automatic Tax Application:
Course enrollment fees subject to tax
Equipment rental fees taxed appropriately
Retail sales include applicable taxes
Exemptions applied automatically for qualifying customers
Next Steps
After setting up tax management:
Process Customer Payments with automatic tax calculation
Record Business Expenses with proper tax handling
Generate Financial Reports that include tax information
Perform Bank Reconciliation including tax transactions
Need Help?
Tax rates not calculating? Check default settings and rate activation status
Exemptions not working? Verify customer exemption setup and certificate validity
Tax reports incorrect? Review transaction categorization and date ranges
Complex tax requirements? Consult with a tax professional or accountant
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