We’ve recently been getting calls asking how to handle the new tariffs that have gone into effect for goods received from China.

Provided you’re willing to charge it to your customer as a separate line item on the invoice, we’ve determined that the best way to handle this is by using the Sales Tax functionality.  To do this, you would need to consider the following.  This list assumes you don’t currently have Sales Tax Reporting enabled:

• Enable Sales Tax Reporting in AR Options.
• Set up a Sales Tax Code and Sales Tax Schedule for the tariff.
• In AR Division Maintenance, determine where you want the credit to go in the GL. For example, if you’re putting the tariff to an expense account when you pay it, consider putting it to that account so they offset.
• Assign the new tariff Tax Schedule as the default for each customer in Customer Maintenance.
• Since Sales Tax Reporting was previously disabled, all items have Nontaxable as their default Tax Class. You’ll need to change that to Taxable during invoice entry, for any items where charging the tariff to the customer is appropriate.
• Invoice forms should be modified to change the text “Sales Tax” to “Tariff”.