 The third thing we got to consider is the customer so remember if I go back into my customers which is under the sales tab and then my customers if you're under the business view it would be under the get paid and pay tab and then the customers and then when we set up our customers by default they're going to be subject to sales tax based on what they bought but maybe they're not subject to the sales tax so if I go into this AAA customer for example and I edit them and I go into their sales tax information which is down here then usually the sales tax is going to be by default based on location that's what generally happens or you can choose the 5% which is the other the other tax if they're subject to that so if you have multiple rates down below multiple subject to sales tax rates then you would choose the applicable one right it's going to default to the based on the location I could choose the 5% if I wanted to or I can say this customer is is exempt from sales tax this customer is tax exempt why maybe they're a government agency or charitable organization or whatever and so and I can put the details so if I did that then I close this out I go to the plus button have a new invoice and I choose everything that's the same AAA customer a product subject to sales tax but and that and even has it sales tax checked off but no sales tax being calculated if that happens you're gonna say hey why isn't it happening I got it checked off and nothing's happening well maybe the customer then is set up to not be subject to sales tax so the next thing you need to check is the customer side is it proper that the sales tax isn't being calculated even though you got to checked off and sales tax set up and the item subject to sales tax because the customer somehow are not subject to sales tax let's close that out and try it again go back to the customer and let's edit the customer and say now that the customer is subject to a different rate so we'll say they're subject to sales tax but maybe it's that five percent rate so I'll go okay so now if I hit the plus button and I go to the invoice and I go everything's the same I go into the customer and I say okay sales tax taxable item but now the rate that's going to be charged is the five percent as opposed to the the normal California rate right and then of course if I chose something that's not subject to sales tax like the service item a diagnostic then sales tax isn't applied because the item is now saying it's not subject to sales tax all right so I'm going to close this back up by default if I go into the customers we'll we'll go this back into the customer and say by default it's usually going to have the default setting of the customer's taxable and then it's going to be based on the location so that's the default unless you say something otherwise so one more thing if I record something on the invoice now you can see how complex this transaction is getting even though the data input is quite easy if I choose an inventory item then what's this going to do the invoice is going to increase the accounts receivable by the full amount including sales tax 54750 the other I'm not going to actually record this by the way I'm just saying what would it do the other side's going to go to sales the 500 driven by the item which we told it to go to the sales revenue account and then the tax is going to go up not to an income account not to revenue but a payable account given the theory that we're not actually charging the sales tax we're just the collection agency the sales tax is being charged by the government to the customer therefore it's not income to us but a payable liability as we collect the tax and then we're going to pay it later and because it's an inventory item inventory is going to be going down and also the cost of good sold is going to be going up and the sub ledger for inventory in terms of by well the sub ledger for inventory by amount is also going to be impacted going down the units of inventory and the the customer sub ledger tracking who who owes us the money is going to be impacted as well complimenting the accounts receivable so a lot's going on with just the invoice now but the data input is quite simple so once again I'm not going to record this closing this out do you want to leave without saving I'm going to say yes sales tax now set up