What is an Excise Tax?
An excise tax is a specific type of tax imposed on certain goods, activities, or services. Unlike general sales tax, which is applied broadly to many goods and services, excise taxes are typically targeted at specific items such as alcohol, tobacco, fuel, and firearms.
How Bravo Applies Excise Tax
In some regions, such as California, firearms, ammunition, and related parts are subject to an excise tax in addition to the local sales tax. Bravo’s system is designed to help you manage this requirement efficiently.
Bravo combines the excise tax with the local sales tax for these specific items.
How It Works in Bravo:
- Example Scenario:
- Suppose your city charges a 9% sales tax on firearms and ammunition.
- California adds an 11% excise tax on these items.
- In Bravo’s tax configuration, these taxes are combined into a single rate, so the tax table will display a 20% tax rate for firearms and ammunition.
This means that when you sell a firearm or ammunition, Bravo applies the combined tax rate to the sale, ensuring that both the sales tax and the excise tax are collected.
Applying an Alternate Tax Table for Exempt Parties
Some customers, such as active law enforcement officers, may be exempt from paying the excise tax. Bravo allows you to set up an alternate tax table to manage these exemptions.
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Setting Up an Alternate Tax Table:
- You can create an alternate tax table in the system configuration that reduces the tax rate in the applicable category (e.g., firearms and ammunition).
- This alternate tax table can then be applied to specific customers who are exempt from the excise tax.
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Applying the Alternate Tax Table:
- Once the alternate tax table is set up, you can apply it to a customer's profile by navigating to the customer’s Business Tab and selecting the appropriate tax table.
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- This ensures that the exempted customers are only charged the applicable sales tax, without the excise tax.
For step-by-step instruction how to setup an alternate tax table and how to apply it to a customer, please refer to our existing article: Apply an Alternate Tax Table for Exempt Parties
Updating Bravo Tax Rates
Bravo gives you the flexibility to update your tax tables as needed to reflect changes in local or state tax laws.
- How to Update Tax Rates:
- You can update your tax tables at any time through Bravo's system configuration. This allows you to adjust the combined tax rates or set up new tax tables as necessary.
- For a detailed guide on how to update your tax rates, please refer to our existing article: Update Sales Tax Rate.
Why This Matters
Understanding how Bravo applies excise tax and how to correctly report it is crucial for ensuring compliance with local and state tax laws. Proper configuration in Bravo helps streamline the process, but it’s important to regularly review your Sales Accounting Reports to ensure accuracy and completeness.
Need More Help?
If you need assistance configuring your tax rates, applying alternate tax tables, or understanding your reports, feel free to reach out to our support team. We’re here to help you ensure that your tax obligations are met with ease.