Configure your Zoho Books account

To enable Galvix to accurately calculate sales taxes and ensure compliance, you must configure your Zoho Books account to collect sales tax and correctly reflect the taxability of customers. This guide provides clear steps to enable sales taxes and mark customer taxability rules in Zoho Books.

What can this guide help with?

• Enable Sales Tax in Zoho Books
• Configure Tax Authorities, Tax Rates and Exemption Reasons
• Set Up Customer Taxability and Exemptions
• Testing an invoice in Zoho Books for tax determination
• Next Steps

Enable Sales Tax in Zoho Books

Sales tax must be enabled in Zoho Books in order to allow both Zoho Books and Galvix to be able to suggest tax related fields.

Steps to Enable Sales Tax:

1. In Zoho Books, go to Settings > Taxes.
2. Click Enable Sales Tax.

If you see fields such as Tax Rates and Tax Exemptions under Settings > Taxes in Zoho Books, it means that sales tax is already enabled.

Configure Tax Authorities, Tax Rates and Exemption Reasons

Create a Tax Authority in Zoho Books

1. In Zoho Books, go to Settings → Taxes
2. Click Tax Authorities
3. Click + New Tax Authority
4. Name the Tax Authority (e.g. California Department of Revenue)
5. Click Save

Create a New Tax Rate

1. In Zoho Books, go to Settings → Taxes
2. Go to Tax Rates
3. Click + New Tax
4. Assign a name to the tax (e.g. California Special Tax)
5. Set the Rate (%) (e.g. 8.5% or 0%)
6. Under Tax Authority, select any
7. Click Save

Create an Exemption Reason in Zoho Books

1. In Zoho Books, go to Settings → Taxes
2. Click Tax Exemptions
3. Click +New Exemptions
4. Name the Exemption Reason (e.g. Government Entity)
5. Select Type as Customer
6. Click Save

Once the Tax configurations are updated, you can create customer exemptions easily in your Zoho Books account.

Set Up Customer Taxability and Exemptions

Galvix relies on the Tax Preference setting in Zoho Books to determine whether a customer is taxable or exempt. By default, customers should be marked as taxable unless they provide a valid exemption certificate (e.g., for government entities, schools, or nonprofits). Review all existing customers in Zoho Books to ensure accurate settings.

Taxable Customers

To review the taxability for a customer or to create a new customer with taxable preference, follow these steps -

1. Navigate to Sales → Customers in your Zoho Books account
2. Create a new customer or edit an existing one
3. Under Tax Preference, select Taxable
4. Under Tax Rate, select a rate from the dropdown (e.g., a state-specific rate or a zero tax rate).
5. Save the changes

Galvix will apply this tax preference to ensure the correct sales tax is charged to the customer’s transactions.

Handling Tax Exemptions

Sales tax exemptions are a criteria that allow customers not to pay sales tax. Often, these customers are government entities, schools, or non-profit organizations. The customer must provide a valid exemption certificate confirming their status. If you have such customers who are exempt from sales tax, you must update their taxability status to 'Tax Exempt' in Zoho Books.

To review the taxability for a customer or to create a new customer with 'Tax Exempt' preference, follow these steps -

1. Navigate to Sales → Customers in your Zoho Books account
2. Create a new customer or edit an existing one
3. Under Tax Preference, select Tax Exempt
4. Enter an Exemption Reason (e.g., “Nonprofit Organization”) and Tax Authority (e.g., “California State Tax”).
5. Save the changes

Galvix will apply zero sales tax to transactions for exempted customers.

Testing an invoice in Zoho Books for tax determination

Once you have completed connecting Zoho Books to your Galvix account and configured your Zoho Books account as per the steps suggested above, we suggest Issuing a test invoice or credit note in Zoho Books to test tax determination and ensure everything is working as expected.

Steps to Test an Invoice:

• In your Zoho Books account, navigate to Sales > Invoices
• Click on +New button to create a new invoice
• Select a Customer who is marked as Taxable in Zoho Books and has an active tax registration in Galvix for their jurisdiction.
• Add a taxable Item to the invoice.
• Add Shipping Charges
• Save the transaction as a draft in Zoho Books.
• Wait about one minute for Galvix to calculate tax and update the draft transaction in Zoho Books.

• Once taxes appear correctly, you may print or send the invoice.
• Once finalized (invoice status in Zoho Books is updated), the transaction will sync into Galvix and appear under the Transactions tab.
• ⚠️You may Void or Delete the test invoice to avoid tax implications.

With these configurations, Galvix can accurately calculate sales taxes, generate return drafts, and keep your business sales tax compliant effortlessly!

Next Steps

Review our documentation on Best practices for invoicing in Zoho Books