 sales por favor. That's the Gibson USA. Back to the products and services. I'm just going to do this for everyone. Epiphone semi hollow body. That one's subject to sales tax too. You're not getting away without the sales tax epiphone hollow body. The government wants a piece of your hollow body. So it's semi hollow body. Now it's semi after they took a piece out. So then we're going to go to the epiphone Les Paul and edit that one as well. And say that one's subject to sales tax and epiphone Les Paul back and now we want epiphone Riviera edit that one. Subject to sales tax as well. And one more. One more. And then we have to stop this good times because it's the last one we get to do. Enjoy it people. Edit the sales tax and then this one is going to be tax on tax on and then tax on wax off. Okay. So there we have it. Then if I was to make a sale up top with an invoice perhaps, invoicing someone. Typically you're going to need a customer up top because it's possible that the customer could be exempt from the sales tax. So it's got the tax rate tax on five percent. So if I let's make a generic customer customer number one and I'll just make a generic customer and put our item down here. We're just going to say an epiphone boom sales tax then being calculated down below as you can see with that five percent. So the generic five percent being calculated. So what's this going to do? I won't actually record it now because we'll record some in future presentations and we'll dive into the transactions in more detail as we do. But notice this adds a level of complexity to the transaction because if we're selling an inventory item it's already kind of complex. We've got the five seven seven fifty that we expect to be collecting from the customer that's going to increase the accounts receivable. The other side going to sales but not including the twenty seven fifty therefore sales is only going up by what we charged the five fifty. The difference twenty seven fifty is increasing a payable a liability for the sales tax payable and then inventory is going down by an amount not shown here but known by the item and the other side is going to cost a good sold. So notice that again this twenty seven fifty is not hitting the income statement as revenue. You can imagine a situation where it would and you have an accounting system that kind of works. You'd say hey the tax is just like an expense. It's a business expense. So you might imagine why don't I record five seventy seven fifty as revenue and then the twenty seven fifty should be an expense basically because that's an expense of doing business for me paying the taxes right. But we don't do it that way. One reason we don't do it that way is because the idea is that you are not the one being taxed as the business owner. That might not be the way it works in practice but that's the idea right. The person being taxed supposedly is the client. You are just the tax collector therefore we shouldn't be recording the twenty seven fifty as revenue. It should just be recorded off income statement as a payable a liability that will accumulate upwards and then we'll pay it down like an accounts payable kind of account periodically when we owe the tax. So let's cancel this out. Now there's one other thing to keep in mind here you might have some customers that are not subject to the sales tax. So you might say I'm making some invoices but I don't want to calculate the sales tax for those particular customers because they're exempt for whatever reason. So in that case you would go into the customers up top and say let's go into our customers. We made customer number one here or where is custom. Let's just do a new customer. So add a contact and then I'm going to say this is customer number two and I'll just add generic customer number two and then on the address. I don't need anything on the address. We'll add more customers later by the way on the sales information. This is what I'm trying to get to. It says I use the organization settings for sales tax meaning that basically means we're going to use the default settings that you're going to be charged sales tax based on the items right. But if they're sub if they're not if this person is exempt from sales tax for whatever reason we could say they're exempt and now if I was to make a another invoice for customer number two customer numero dose. So I'm going to say this is going to go customer two and then when I put the item throw down the item it doesn't calculate the sales tax right. Whereas if I had customer one again custom this contact has different settings. Let's just let's just cancel out of this because I don't want to confuse. I don't want to confuse anybody here including myself. I confuse easily. So if I say this is customer number one again no customer found. So I'd have to add customer one. But the idea being that they are not exempt. Therefore the sales tax is calculated right. So customer two it was exempt. Notice if I chose something that I didn't have sales tax on like a diagnostic or the hourly service no sales tax is calculated because the item didn't have a sales tax on it. So I got to turn on the sales tax. I got to make sure I've got the proper sales tax calculations in place which could be based on your location. You could do that but we made the generic sales tax. Then we have to make sure the items are set up to populate sales tax per line item because I could have multiple line items right. I have that one and then I could have another item. This one is subject to sales tax. That one wasn't right. So now I've got an invoice with two items but only one of them subject to the sales tax. And by the way if you if you did need to generically adjust it you can go into these line items and say that one should be subject to sales tax like that. So that's a way to kind of override the system. That's a kind of an override. You don't want to have to override the system generally. You want it to all be set up so that you can just create the invoice and the sales tax will calculate the way it should be calculating. All right so now that that is set up when we do the data input and future presentations we'll have that generic five percent sales tax calculated.