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How the user sets up their taxes for Accounts Receivable depends on their location.
USA:
TAX 1 = STATE and DO NOT mark as a tax credit tax
TAX 2 = COUNTY and DO NOT mark as a Credit Tax.
TAX 3 = LOCAL and DO NOT mark as a Credit Tax
On the AR Control File, the user must NOT check the box that says 'Calculate Retainage on Tax 1'
Canada - Quebec:
If you the user resides in Quebec, he must setup your tax codes as follows:
TAX 1 = GST and marked as a tax credit tax
TAX 2 = QST and marked as a Credit Tax.
The percentage for QST being set as the effective rate by the following calculation.
QST Effective = (100% + GST%) * QST%
On the AR Control File, you must NOT check the box that says 'Calculate Retainage on Tax 1'
Canada GST Not Harmonized:
If your company is in a Province that has not harmonized with the GST, then the user has two choices. If he wishes to book the GST retainable at the time of entering the invoice, then he must check the field on the AR control file 'Calculate Retainage on Tax 1'. If he only wants to book the GST retainable at the time of releasing the retainage, then do not check this field.
TAX 1 = GST and marked as a tax credit tax
TAX 2 = PST Not marked as a tax credit tax
Canada GST Harmonized (HST):
If the user`s company is in a Province where there have harmonized the GST and PST, then he has two choices. If you wish to book the Tax retainable at the time of entering the invoice, then he must check the field on the AR control file 'Calculate Retainage on Tax 1'. If the user only wants to book the Tax retainable at the time of releasing the retainage, do not check this field.
TAX 1 = GST plus PST and marked as a tax credit tax.