It seems like the Dynamics GP forums are alive with sales tax questions lately. So, I thought I might tackle this one in the same manner that I do in the classroom-- by breaking it down in to steps. I treat sales tax as a three step process.
1. Document Default
2. Item or Setup Default (depending on if you are working with Receivables or Sales Order Processing, for example)
3. Tax schedule comparison
So, for this post, we are going to keep it simple and look at taxes in Receivables Management and Payables Management. I promise another post on Sales Order Processing and Purchase Order Processing next week :) But, for now, lets keep it simple.
Let's start with Step 1. There is one key setup that can impact the tax schedule that appears on a document (whether it be Payables or Receivables) by default. In your company setup, Tools>>Setup>>Company>>Company>>Options, there is a setting to Use Shipping Method to Determine Default Tax Schedule.
- If this option is marked, then the tax schedule that appears on the transaction will be dependent on whether the shipping method is a pickup or delivery method (more on this later).
- If this option is unmarked, then the tax schedule that defaults on the transaction will always be the Vendor Address' schedule (on Payables) or the Customer Address' schedule (for Receivables)
- MOTAX: Contains the MOSTATE, KCCITY, MOSPEC, and JCKCTY Details which will be assigned to my Missouri based customers
- KSTAX: Contains the KSSTATE and KCKCITY Details which will be assigned to my Kansas based customers
- VALID: Contains the MOSTATE, KCCITY, JCKCTY, KSSTATE, KCKCITY which contains all of the currently valid tax details. I have purposely left off MOSPEC, it was a special tax that was only charged last year in MO and is no longer valid.
- Shipping Method with a delivery type: MOTAX (from Customer Address)
- Shipping Method with a pickup type: KSTAX (from Company Setup)
- MOSTATE, KCCITY, JCKCTY are the only taxes that would be calculated, since MOSPEC did not exist in the tax schedule in Receivables Management setup for comparison