Belinda Allen, Smith & Allen Consulting, Inc. (SACI) aka Belinda the GP CSI.  Microsoft Professional, MCT and MVP.describe the imagedescribe the image

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Microsoft Dynamics Sales Tax Setup Overview (video)

  
  
  
  
  

This is a high level overview of how Sales Tax is setup and works in Microsoft Dynamics GP.

Sales Taxes calculations are made based on:

  1. The item being sold,  is it setup as Taxable, non-taxable or is tax determined based on whether or not the customer it taxable?
  2. Is the Customer Taxable or non-taxable?
  3. How is the item being received, by delivery or is the customer picking the item up?

Let’s start with step 1 above.  Is the Item taxable?

If it is not taxable, then it’s easy, no tax is calculated even if the customer is taxable.

If the item is taxable, we need to know what taxes to charge, either specifying a specific tax schedule (and what is that tax schedule) or charge taxes based on the customer?

Let’s review step 2 above.  Is the Customer Taxable?

After reviewing step number one we see why this is important.  If the item is setup to base tax calculations on the customer, we need to know if the customer is taxable and if they are taxable which tax schedule should be used when selling items to them.

Finally step 3 from above.  Is the item going to be Picked Up or Delivered?

If the item is going to be delivered to the customer, AND the tax is based on the customer, AND the customer is taxable, we charge based on the tax schedule for the customer.

If the item is going to be delivered to the customer, AND the tax was setup with the item, we charge based on the tax details that are common in both the Item tax schedule AND the customer’s tax schedule.

If the item is going to be picked up by the customer, AND the tax is based on the customer, AND the customer is taxable, we charge based on the tax schedule defined in our Company Setup.

If the item is going to be picked up by the customer, AND the tax was setup with the item, we charge based on the tax details that are common in both the Item tax schedule AND the tax schedule defined in our Company Setup.

Microsoft Dynamics GP Sales Tax Building Blocks from Belinda, The GP csi.

As with all aspects of Microsoft Dynamics GP, or any other Accounting or Enterprise Resource Planning (ERP) system, the more detail you in the system, the better the reporting will be.  This is all about making that monthly or quarterly sales tax report easier to prepare.  Once GP is setup correctly, your life will be easier!

Belinda (the GP CSI) Allen
Belinda@saci.com
917-445-9070

Comments

Hi Belinda, 
 
Thank you for the great post & video! They're very useful in helping me understand the basic structure of GP tax calculation. I have couple of questions for you: 
 
1. For #2, how do you determine whether the customer is taxable or not? Is there a field in GP that identify this? 
 
2. "If the item is going to be picked up by the customer, AND the tax is based on the customer, AND the customer is taxable, we charge based on the tax schedule defined in our Company Setup."  
 
>> Through my testing, I notice that it's not based on Tax Schedule under Company Setup but under Site Setup. Under which condition would it get the tax from Company Setup? I couldn't recreate any scenario where it'd pull from Company Setup. 
 
Please advise 
 
Many Thanks & Best Regards, 
Nikki 
 
Posted @ Thursday, August 29, 2013 12:12 PM by Nikki
HI Nikki, 
1-If your product and/or services are taxable, you should assume a customer is taxable unless they provide you with a Tax ID number and a Sales Tax Exemption document. No worry, they'll be used to providing it to vendors. 
 
2-Actually you are correct here. My comments were for older versions. The Site Tax schedule will rule here. 
 
Thanks for your comments!
Posted @ Tuesday, September 10, 2013 4:56 PM by Belinda Allen
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