Managing Sales Tax

When the amount of an order is calculated, the appropriate tax will be calculated (or recalculated if an existing order is being adjusted or canceled) and stored with the order. U.S. states have a variety of methods for calculating and charging sales tax, some of them potentially overlapping. For that reason, sales tax rate charts should be studied before defining sales tax calculation methods.

Most states have their sales tax information available online.

Sales tax in the U.S. can be a combination of taxes charged at different levels. Tax definitions are created based on how the calculation will work, using the following records:

• Country
• State
• County
• City
• Postal Code Range

If the ship-to address is changed on an invoiced order line for any subsystem, the system will not recalculate sales tax.

Sales tax is calculated based on the ship-to location, but the tax exemption is owned by the bill-to customer. If the bill-to customer is tax exempt in the ship-to location (i.e., state, country, etc.), the order will remain tax exempt.  

To add a new sales tax country:

1. From the Order Settings page, select Manage Sales Tax.
   The Manage Sales Tax Countries page displays.
   
2. To create a new sales tax country, select New Sales Tax Country.
   The Add New Sales Tax Country page displays, as shown below.
   
   1. Select a Financial Company from the drop-down.
   2. Select a Country from the drop-down.
   3. Select a Tax Category from the drop-down.
3. To continue defining sales tax, select Save and Manage Sales Tax.
   1. Alternatively, select Save to save and return to the Manage Sales Tax Countries page.

To define sales tax: 

1. From the Manage Sales Tax Countries page, select Manage Sales Tax from the contextual menu within the grid.
   
   Alternatively, when defining a new sales tax country, select Save and Manage Sales Tax.
   The Sales Taxes page displays.
   
2. Select + New Sales Tax.
   The Add New Sales Tax page displays.
   
   1. Select a Calculation Method from the drop-down.
      The available fields depend on the Calculation Method selected.
   2. Enter the address information of the sales tax, including the following:
      1. State
      2. County
      3. City
      4. Postal Low
      5. Postal High
   3. Enter the Tax Percent.
   4. Click the Liability Account link to search for a liability account associated with the sales tax.
   5. Select the Valid From and Valid Thru dates from the drop-down.
   6. Check the appropriate checkboxes. The options include the following:
      1. Tax Shipping
      2. POS
3. Select Save.

Screen Element	Description
Sales Tax Countries
Financial Company	Drop-down. The company associated with the sales tax.
Country	Drop-down. The country associated with the sales tax. There should be a single record for the bill-to or ship-to address country and the percentage should be calculated. This is used for GST (Canadian) taxes.
Tax Category	Drop-down. The tax category that controls how taxes are charged. Allows segregation of the tax records. For example, Sales Tax, Sub Tax, or VAT. Values in the drop-down are populated based on the codes defined for the non-fixed ORD "TAX_CATEGORY" system type.
Sales Taxes
Calculation Method	Drop-down. The calculation method of the sales tax. For example, City tax or State tax. The value selected here determines the enabled fields.
State	Drop-down. The state associated with the sales tax calculation. There should be a single record for the bill-to or ship-to address state and the percentage should be calculated. You do not have to enter a postal code range if this is selected.
County	Text box. The county associated with the sales tax calculation. There should be a single record for the bill-to or ship-to address state, county, and city, and the percentage should be calculated. You do not have to enter a postal code range if this is selected.
City	Text box. The city associated with the sales tax calculation. There should be a single record for the bill-to or ship-to address city and state, and the percentage should be calculated.
Postal Low	Search field. The lowest number of the postal code range selected for a sales tax. This range is compared to the zip code of the bill-to or ship-to address to determine which taxes should be calculated.
Postal High	Search field. The highest number of the postal code range selected for a sales tax. This range is compared to the zip code of the bill-to or ship-to address to determine which taxes should be calculated.
Tax Percent	Text box. The sales tax percentage carried to four decimal places.
Liability Account	Search field. The liability account affected by the sales tax percentage. This account is needed for each setup and will be credited as part of the sales transaction.
Valid From	Date chooser. The date the sales tax begins.
Valid Through	Date chooser. The date the sales tax ends.
Tax Shipping	Toggle. When set to YES, indicates the shipping amount will have tax charged regardless of whether the product is taxable.
POS Checkout	Toggle. Point of sale. When set to YES, indicates that this sales tax definition is a Point-of-Sale tax. This is used for on-site meeting bookstores where tax is typically not charged for products ordered through the organization. This is used to identify sales tax that is only used for POS. For example, assume an organization’s fulfillment warehouse is in Virginia, so all customers with a ship-to address of Virginia get charged sales tax. Now, assume the organization holds their annual conference in Richmond, VA, so they want all meeting attendees who purchase items at the conference to be charged Virginia sales tax, regardless of the customer’s ship-to address. In this example, the Virginia state sales tax would have the POS tax set to NO, because VA sales tax is not only charged for POS. Now assume that same organization holds next year’s conference in Philadelphia, and they want all meeting attendees to be charged Pennsylvania state tax, regardless of the customer’s ship-to address. In this example, the Pennsylvania sales tax would have the POS tax set to YES, because the organization only wants to charge PA sales tax if a POS batch is open. If the POS tax checkbox was set to NO, customers who ordered from the organization who live in Pennsylvania would get charged sales tax, when really the organization only wants to charge sales tax on customers who live in Virginia. If you want to set up sales tax for POS, as well as for people who live in the state, you can use the same setup. Set the POS toggle to NO if you also want the tax charged for people who live in the state. If the tax is only to be charged with a POS batch, then set the POS toggle to YES.