Tax category types in Blackpurl control how sales tax amounts are allocated to General Ledger (GL) accounts when processing customer and vendor invoicing. Setting them up correctly ensures your accounting package receives accurate tax entries for both the taxes you collect from customers and the taxes you pay on vendor invoices.
What Tax Categories Do
Tax categories serve two purposes in Blackpurl:
They are assigned to individual tax rates to allocate sales tax amounts to specific General Ledger accounts when processing customer and vendor invoicing.
They can be used in Settings & Controls to define how Non-Inventory Tax Credit (NITC) accounting entries are allocated. This functionality applies specifically to dealers in Australia and New Zealand.
Recommended Setup
Your Blackpurl should be configured with at least two separate tax categories:
One to account for taxes charged to customers and collected from customers
One to account for taxes charged on vendor invoices and payable by the dealership
Blackpurl strongly recommends against using a single tax category for both selling and purchasing tax amounts. Keeping them separate gives you accurate GL allocations for each type of tax transaction.
Australia and New Zealand Dealers
If your dealership is based in Australia or New Zealand, you can assign the same General Ledger account to both your selling and purchasing tax categories. Because the tax rate is the same for both, a shared GL account is appropriate in this case.
Adding Additional Tax Categories
Any time a sales tax needs to flow into a different General Ledger account, you must create an additional tax category to handle it. Common examples include County Tax, State Tax, GST, and Environmental Tax. Each tax category directs entries to the GL account assigned to it, so separate categories are required for each distinct GL destination.
