Sales tax is configured in Sprout by setting up localities and rates, marking an item as taxable and setting a customer as taxable.

When a customer is set as taxable and an invoice is created, Sprout evaluates items and finds taxable items.  Sprout then runs through localities and their associated rates adding up the correct sales tax and applying it to the subtotal to get the total invoice due.

When taxes are charged on an invoice the particular general ledger account is credited for accruing taxes owed.

The Sprout tax system is also used to properly record taxes paid, such as GST.