SUMMARY
This article describes how taxes are calculated in Purchase Order Processing.
MORE INFORMATIONStep1 Advanced versus Single Schedule
Go to Company Setup Options(Setup - Company - Company - Options).If the Use Shipping Method when Selecting Default Tax Schedule option ismarked, the following table will explain which tax schedule will default on a Purchase Order in Purchase Order Entry (Transactions- Purchasing - Purch. Order Entry). If it is not marked,the default tax schedule assigned to the vendor’s purchase address will be the default.
The Tax Calculation option listed in the tablebelow can be foundwithin Purchase Order Processing Setup Options (Setup - Purchasing - Purchase Order Proc. - Options).
Step 2 The Item's Purchase Tax Option
In Item Maintenance (Cards -Inventory - Item) look at the Item's Purchase Tax Option line.The following table will explain which tax schedule will default for the item in Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item)
The tax schedule specified in Item Maintenance (Cards - Inventory - Item is always compared to determine which tax details to use. The item tax schedule that defaults for the item in Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item) is explained below:
Based on Vendor Inventory Item:
If the shipping method that is assigned to the transaction is a PICKUP type, taxes are calculated for each detail in the schedule that is assigned to the purchase address of the vendor. No comparison is made. If the shipping method that is assigned to the transaction is a DELIVERY type, taxes are calculated for each detail in the schedule that is assigned to the default site. No comparison is made.
Step 3 Comparing tax schedules
The tax schedule defaulting within Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item) will be compared to another tax schedule. The other tax schedule used for comparison is listed in thetable below:
NoteThe tax details that are common between the two schedules will be used.
This article was TechKnowledge Document ID:26277
This article describes how taxes are calculated in Purchase Order Processing.
MORE INFORMATIONStep1 Advanced versus Single Schedule
Go to Company Setup Options(Setup - Company - Company - Options).If the Use Shipping Method when Selecting Default Tax Schedule option ismarked, the following table will explain which tax schedule will default on a Purchase Order in Purchase Order Entry (Transactions- Purchasing - Purch. Order Entry). If it is not marked,the default tax schedule assigned to the vendor’s purchase address will be the default.
The Tax Calculation option listed in the tablebelow can be foundwithin Purchase Order Processing Setup Options (Setup - Purchasing - Purchase Order Proc. - Options).
| Tax Calculation Option | Purchase Order Type | Shipping Method | Default Tax Schedule | Prompt Name |
| Advanced | Drop-ship | Not applicable | Blank | Tax Schedule |
| Advanced | Standard | Pickup | Tax schedule assigned to the vendor’s purchase address | Purch Addr Tax Sched |
| Advanced | Standard | No Shipping Method | Tax schedule assigned to the vendor’s purchase address | Purch Addr Tax Sched |
| Advanced | Standard | Delivery | Purchases Tax Schedule assigned in Company Setup (Setup-Company-Company) | Company Tax Sched |
| Single Schedule | Not Applicable | Not Applicable | Tax schedule that is assigned as Single Schedule in Purchase Order Processing Setup Options (Setup-Purchasing-Purchase Order Proc.-Options) | Tax Schedule ID |
Step 2 The Item's Purchase Tax Option
In Item Maintenance (Cards -Inventory - Item) look at the Item's Purchase Tax Option line.The following table will explain which tax schedule will default for the item in Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item)
The tax schedule specified in Item Maintenance (Cards - Inventory - Item is always compared to determine which tax details to use. The item tax schedule that defaults for the item in Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item) is explained below:
| Item | Default tax schedule |
| Inventoried Item - Taxable | Purchase tax schedule assigned to the item in Item Maintenance (Cards - Inventory - Item) |
| Inventoried Item - Nontaxable | blank |
| Inventoried Item - Based on vendor | default tax schedule assigned to the vendor's purchase address. |
| Non-inventoried Item | Tax schedule assigned to the non-inventoried items in the Purchase Order Processing Setup Options window |
Based on Vendor Inventory Item:
If the shipping method that is assigned to the transaction is a PICKUP type, taxes are calculated for each detail in the schedule that is assigned to the purchase address of the vendor. No comparison is made. If the shipping method that is assigned to the transaction is a DELIVERY type, taxes are calculated for each detail in the schedule that is assigned to the default site. No comparison is made.
Step 3 Comparing tax schedules
The tax schedule defaulting within Purchasing Item Detail Entry (Transactions - Purchasing - Purchase Order Entry - expansion box to the right of Item) will be compared to another tax schedule. The other tax schedule used for comparison is listed in thetable below:
NoteThe tax details that are common between the two schedules will be used.
| Tax Calculation Option | Inventory Control | Shipping Method | Default Tax Schedule | Prompt Name |
| Advanced | Not Applicable | No Shipping Method | Tax schedule assigned to the purchase order in Purchase Order Entry | Purch Addr Tax Sched |
| Advanced | Not Applicable | Pickup | Tax schedule assigned to the purchase order Purchase Order Entry | Purch Addr Tax Sched |
| Advanced | Registered | Delivery | Purchase tax schedule assigned to the site in Site Maintenance (Cards - Inventory - Site) | Site Tax Schedule ID. |
| Advanced | Not Registered | Delivery | Purchases tax schedule assigned in Company Setup (Setup-Company-Company) | Company Tax Sched |
| Single Schedule | Not Applicable | Not Applicable | Tax schedule that is assigned as the single tax schedule in Purchase Order Processing Setup Options (Setup-Purchasing-Purchase Order Proc.-Options) | Tax Schedule ID |
This article was TechKnowledge Document ID:26277