Tax exception groups identify products that are taxed outside the normal tax rules for selected customers. You can assign an exception group to a product, a group of products, a customer, or a group of customers.
For example, as a plumbing business you are not charged tax on tools purchased because you have a Resale Tax Exemption set up, meaning that when you resell a tool you charge tax at that point. You create a tax exception group called TOOLS and set the exception at the product level, tax code level, and the customer level. Standard hierarchy rules apply when the system checks for an exception.
For a tax exception to apply, you need to:
Create the group and the locations to which it applies.
Assign the group to the customer purchasing the product, unless the exception group applies to all customers.
Assign the group to the product or price line being purchased.
If restaurants do not have to pay taxes on paper goods, you would set up the tax system as follows:
Create a tax exception group called RESTAURANTPAPER.
Assign the exception group to all paper products.
Assign the RESTAURANTPAPER exception group to each of your restaurant customer records. If a limited number of zip codes, geocodes, or states are defined on the Tax Exception Group Maintenance screen, verify that the customer tax jurisdictions are included in the list.
Flag the RESTAURANTPAPER exception group as being never taxable in the product records that belong to this group.
To make a product non-taxable for all customers in a state, set up the tax system in the following way:
First, create a tax exception group. Set the Customers Exempt field to Y and enter the state in the Zip Codes/Geocodes/States field.
Then, in the product or price line record that will be non-taxable, flag the exception group as being never taxable.
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