Creating Sales Tax Jurisdiction Codes

Create tax jurisdiction codes to identify tax rates for a jurisdiction and the G/

Tax jurisdiction codes are assigned to zip codes. During order entry, tax is applied according to the zip code.

Note: If you have the Epicor Tax Connect companion product and use Avalara Usage Codes, see Additional Configuration Settings in the Epicor Tax Connect documentation.

In addition to its regular rate, each tax code can have a reduced tax rate. The reduced rate is triggered by tax exception groups. You can also use a tax jurisdiction code to:

Note: If you use the Eclipse National Sales Tax Database companion product, creating and maintaining tax jurisdiction codes is not required. Geocodes replace tax jurisdiction codes.

From the Maintenance > Tax, Duty & Exchange Rates menu, select Tax Jurisdiction Code Maintenance to display the Tax Jurisdiction Code Maintenance window.

From the File menu, select New to create a new code and enter a unique and descriptive tax code, up to 10 characters in the Enter New Tax Code ID field.

Do not use SHIPTO, BRANCH,

Click OK.
Use the header fields to define the jurisdiction code you are creating.

Field	Description
Effective Date	Enter the date when the new tax code becomes effective.
Description	Define the tax code or explain what political entity or entities the tax jurisdiction includes.
Use Tax Rate from Original Sales Order on Return	select one of the following to determine which sales tax rate to use on return orders: Yes - Uses the tax rate from the original sales order. No - Uses the tax rate on the day the item is returned. This is the default. If this field is blank, the system uses the setting in the Use Tax Rate From Original Sales Order control maintenance record. Note: When you want to use the tax rate from the original sales order, and you are entering a return order, you must enter the original sales order number. Otherwise, the system uses the current tax rate. In addition, you cannot include positive quantity items on the return sales order.
Use Prev Tax Rates for Orders Before Effective Date	do one of the following: Leave this field blank - Applies the tax rate you are entering for this jurisdiction code to all orders, regardless of whether they were entered prior to the date the effective date of the jurisdiction code. Enter a date - Applies the previous tax rate to orders entered prior to the effective date of the jurisdiction you are creating, up until the date you enter here. Enter a date in this field if your tax rate has changed, but you want to use the previous sales tax data for orders entered prior to the new tax rate taking effect, but whose material has not yet shipped. For example, you might honor the previous sales tax for orders entered prior to the effective date, but whose material is planned to ship within 90 days.
Tax Exception Groups	Enter any exception groups this jurisdiction code should include.
Misc G/L Account IDs	Enter any general ledger accounts that this tax jurisdiction code can apply to.

Use the columns in the table to further define how you want to use the tax jurisdiction code.

Field	Description
Jurisdiction G/	Identify the G/
Rate	Enter the normal tax rate for each G/
Reduced	If a tax authority offers a reduced rate, enter the rate in this column. The reduced rate is used when triggered by a tax exception group.
Freight & Handling	Enter any applicable freight and handling charges that should be taxed.
Max Taxable Per	Indicate the maximum tax dollar amount allowed by type.
Type	To allow a jurisdiction type to be assigned to each G/L account, use this column to select what type of tax rate you are defining, City, State, County, or Local.

Save your changes and exit the window.

Reduced Tax Rates

Some tax authorities identify types of products or customers that are eligible for a reduced tax rate. Each G/

Taxing Freight and Handling Charges

The system does not charge tax on freight and handling charges, unless you set the associated G/

From the Maintenance > Tax, Duty & Exchange Rates menu, select Tax Jurisdiction Code Maintenance to display the Tax Jurisdiction Code Maintenance window.
Display a tax jurisdiction code.
In the Jurisdiction G/ column, identify the G/
In the Freight & Handling column, enter the tax rate.

If there is...	Then...
a Total Freight amount entered on the Sales Order Entry Totals tab and a G/	the Total Freight amount is multiplied by the rate you enter here to obtain the tax amount that is posted for the freight.
no tax rate entered in the Freight & Handling column when one is needed	the system uses the regular tax rate entered in the Rate column.
no Total Freight amount entered on the Sales Order Entry Totals tab, or there is no G/	the system applies no tax to the Total Freight amount.

Save your changes and exit the window.

Maximum Taxable Dollar Amount

Some local tax authorities set a maximum dollar amount on which you can charge tax. For example, if the price of a product on a sales order is $2500 and the Maximum Taxable amount is $1200, the full rate sales tax is only charged on $1200. If more than one authority within the jurisdiction has the same allowance, then repeat that amount for each authority.

From the Maintenance > Tax, Duty & Exchange Rates menu, select Tax Jurisdiction Code Maintenance to display the Tax Jurisdiction Code Maintenance window.
Display a tax jurisdiction code.
In the Jurisdiction G/ column, identify the G/

The Max TxablePer column displays either a blank or * Splt* to indicate that a value has been set on the Split Tax Rate Maintenance screen.

In theMaxTaxablePercolumn, indicate whether the maximum taxable value is based on a single line item, extended line item, or the entire order. PressF10and selectItem,Ext, orOrder.

If you select...	Then Eclipse checks...	Example: Max Taxable = $1600
Item	the dollar amount of each single item on the order. When the dollar amount on any item exceeds the Maximum Taxable value, the full rate sales tax is only charged on the maximum taxable amount.	3 widgets @ $2000 each = $6000 full tax on $4800 (3 x $1600) reduced or no tax on $1200 (3 x $400)
Ext (extended)	the extended dollar amount of each line item on the order. When the extended dollar amount on any line item exceeds the Maximum Taxable value, the full rate sales tax is only charged on the maximum taxable amount.	3 widgets @ $2000 each = $6000 full tax on $1600 reduced or no tax on $4400
Order	the total dollar amount of the entire order. When the dollar amount of the entire order exceeds the Maximum Taxable value, the full rate sales tax is only charged on the maximum taxable amount.	3 widgets @ $2000 each = $6000 5 tools @ $1000 each = $5000 full tax on $1600 reduced or no tax on $9400
Ship To	existing invoices with a previous date that share the same ship-to account and the same purchase order number. When the dollar amount of the ship-to orders exceed Maximum Taxable value, the full rate sales tax is only charged on the maximum taxable amount.	When two orders share same ship-to and PO#: Order 1 1 tool @ $1000 each = $1000 full tax on $1000 reduced or no tax on $0 Order 2 3 widgets @ $2000 each = $6000 full tax on $600 reduced or no tax on $5400

Save your changes and exit the window.

Product Exception Groups

If a product tax exception group spans all the customers in a jurisdiction, apply the tax exception to the tax jurisdiction rather than individual customers.

Canadian HST, GST, and PST

If your company does business in Canada, you can also flag a tax account associated with the tax code as a Harmonized Sales Tax (JST), Goods and Services Tax (GST), or Provincial Sales Tax (PST) account. These settings are used for reporting purposes and you can set each to display on your sales forms using the following control maintenance records: