Sales Tax

Sales tax management in Blueprint Studio ensures that taxes are applied accurately to every sale and purchase transaction. The system supports multiple jurisdictions, project-specific tax codes, and automatic calculations at the time of invoicing.

💡 Tip: Sales tax is only recognized as a liability once an invoice is issued — not when a proposal or estimate is created.

Understanding Tax Codes

A Tax Code in Blueprint Studio represents a single tax jurisdiction or a combination of jurisdictions (for example, “NY State + NY City”). Each tax code includes a name, rate, and can optionally be linked to a parent tax code for grouping or reporting.

To create or edit tax codes:

Step

Go to Settings → Tax Codes.

Step

Click New Tax Code.

Step

Enter the following details:

Name (e.g., “New York City Sales Tax”)
Rate (e.g., 8.875%)
Parent Tax Code (optional, e.g., “New York State”)

Step

Click Save.

💡 Tip: Parent tax codes help you group related local tax jurisdictions for reporting (for example, multiple NY city codes can roll up to “New York State”).

Project-Level Tax Codes

Each project in Blueprint Studio has a default tax code that controls the tax rate applied to new items added to the project.

To change the tax code for a project:

Step 1

Go to Projects → Select a Project → Edit Project.

Step 2

Locate the Tax Code field.

Step 3

Choose the correct tax code from the dropdown.

Step 4

Click Save.

⚠️ Note: Changing a project’s tax code does not automatically update existing items — only newly added items will inherit the new default.

How Default Tax Codes Work

When you create a new item within a project:

The item automatically inherits the project’s current tax code.
If you later change the project’s tax code, existing items remain unchanged unless explicitly updated.

This ensures tax history and prior pricing remain accurate.

💡 Tip: This behavior helps preserve audit integrity — tax changes do not retroactively affect previous transactions.

Updating Tax Codes on Existing Items

If items were entered with the wrong tax code, you can bulk update them easily.

To update tax codes for existing items:

Change project default

Change the Tax Code on the project to the correct one.

Navigate to item list

Go to the project home page then Items → Item List.

Review the Tax Codes assigned

Review the Tax Code column in the Item list (toward the end by default)

Select the items you want to change

Select the items you want to update using the checkbox.

Start the update

Click Bulk Actions → Update Tax Code.

Review & Confirm

Review the confirmation message on the screen and confirm when prompted.

⚠️ Note: Only items not yet on a proposal or invoice will be updated. Items already committed to documents remain locked to preserve accounting accuracy.

Recalculating Sales Tax for Rate Changes

If your jurisdiction’s tax rate has changed, you can recalculate tax values on items using the bulk update tool.

To recalculate sales tax after a rate change:

Update the tax rate

Update the Tax Rate in Settings → Tax Codes.

Navigate to the Project Items

Go to the project home page then Items to view the Item List.

Start the update

Click Bulk Actions → Recalculate Sales Tax.

Confirm changes have been applied

The system will use the updated rate to recalculate the tax for all eligible items.

💡 Tip: This tool is especially useful when statewide or city-level rate changes occur mid-year.

Overriding the Tax Code on a Proposal

In some cases, a proposal may need to use a different tax code than the project’s default — for example, when services are taxed at a different rate than products. In these situations, the tax code can be overridden directly at the Proposal level. To do this, open the proposal and click Edit Proposal, then select the appropriate Tax Code from the dropdown. When saved, all items associated with that proposal are automatically updated to use the new tax code, and their tax amounts are recalculated accordingly. This ensures the proposal reflects the correct rate for its specific scope of work, without changing the project’s overall default tax settings.

Recognizing Sales Tax Revenue

Sales tax is recognized only at the time of invoicing — not at proposal or item creation.

When an invoice is created, the system calculates tax based on each item’s assigned tax code and rate.
The total tax amount appears in the invoice summary and is tracked for reporting.
Once the invoice is marked as Paid, the tax liability is confirmed for accounting purposes.

💡 Tip: This approach follows standard accrual accounting practices — tax is recognized when the sale occurs.

Purchase-Side Sales Tax (Vendor Purchases)

Blueprint Studio also allows recording sales tax on vendor purchases to help your accountant track tax paid to vendors. This ensures accurate reporting of your net tax liability.

To record sales tax on a purchase or item:

Navigate to the item

Edit an Item through the Item List or Purchase Order

Find the field

Locate the Tax Tax to Vendor field.

Enter the tax paid to the vendor

Enter the vendor’s sales tax amount or applicable tax code.

Save the item

Click Save.

You can view the total sales tax paid to vendors in the Invoice List and related purchase reports.

💡 Tip: Tracking vendor-side tax helps your accountant offset sales tax liability against taxes already paid — reducing what you owe to the state.

Sales Tax Liability Report

The Sales Tax Liability Report provides a detailed breakdown of taxable sales by jurisdiction.

To run the report:

Navigate to the report

Go to Reports → Sales Tax Liability.

Filter by Date Range

Choose a Date Range which filters on the invoice date

Optional filter by Tax Code

Filter by Tax Code or Jurisdiction (if needed).

Run the report

Click Run Report.

The report includes:

Total taxable sales
Total tax collected
Breakdown by Tax Code and Parent Code
Vendor-side sales tax paid (if tracked)

💡 Tip: Use this report to file your periodic sales tax returns accurately.

Example Workflow

Here’s how a typical sales tax workflow looks in Blueprint Studio:

Step

Set up Tax Codes (e.g., NY State, NY City).

Step

Assign a default tax code to the project.

Step

Create items — they inherit the project’s code automatically.

Step

When ready, generate an Invoice — tax is calculated and displayed.

Step

Tax is reported only when the invoice is issued.

Step

Track all tax activity through the Sales Tax Liability Report.

💡 Tip: Always review your tax setup at the start of each project to avoid rework later.

Best Practices

Review your tax codes annually for rate changes.
Use parent tax codes for multi-jurisdiction reporting.
Always confirm tax codes before adding items to proposals or invoices.
Use bulk update tools for efficiency when adjusting project-wide tax settings.
Record vendor tax payments to reduce your net tax burden.

Next Steps

Once your sales tax setup is complete, ensure your QuickBooks Integration is configured to match your liability accounts — this allows seamless reporting between Blueprint Studio and your accounting system.

Next → QuickBooks Integration

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Last updated 2 months ago