Company > Settings > Tax Calculation Methods Expense and service | Project and vendor | Location > Tax by expense and service: Setting tax rate by expense and service is the simplest system for tracking taxes. It is effective for companies where a single tax rate is applicable to all services and another is appicable to all expense items. Using this system, when you create a new service or create a new expense item, you indicate whether or not it is taxable. You then establish the tax rates in the Invoice options. > Tax by project and vendor: Setting tax rates by project and vendor is particularly useful if projects or vendors are based in different states and are therefore subject to different tax rates. Using this system, when you create a new project or create a new vendor, you can establish default federal and state tax rates. Then if a timebill is associated with one of these projects or vendors and is for an expense or service that was designated as taxable when it was created, the tax for this timebill will be automatically calculated using the default rates and displayed on the invoice. > Tax by location: Setting tax rates by location handles more sophisticated tax requirements, including US federal and state, and Canadian GST, PST, and HST. To create a new tax location: 1. Click on the Account tab. 2. Click on the "Create..." drop-down menu and select "tax location." 3. Name your tax location. 4. Enter the default tax rates for US Federal and State, Canadian GST and PST, or Canadian HST for this location. 5. Complete the internal accounting code for each tax rate you indicated above. 6. Enter any relevant notes, if desired. 7. Click "Include GST in PST calculation" if you want the GST to be added to the total before the PST percentage is applied. 8. Click "Save" or "Save & create another tax location." Once you have created tax locations, a "Tax location" dropdown menu appears on the relevant forms throughout OpenAir. Tax locations are applied throughout the application as follows: To apply taxes to invoices the tax location must be indicated on a project-by-project basis when creating a project or editing a project. To apply taxes to purchase orders the tax location must be set for each vendor when creating or editing a vendor. To apply tax locations to expense reports the tax location must be set when creating or editing creating or editing receipts. To activate tax locations for expense reporting, however, an account administrator must first check the "Enable tax locations on receipts" box in the Tax Options section of the My Account > Company > Settings form.