The same product can be taxable or not, depending on which customer is buying it, and why that customer is buying it. For example, depending on the tax jurisdiction, a product may be taxable if used in the manufacture of another product, but not taxable if used for resale to another customer. Additionally, Canadian distributors may have product line items subject to either GST (Goods and Services Tax) or PST (Provincial Sales Tax).
Using the Line Item Taxable view, order takers can control which line items are taxed, and whether they are taxed at a full or reduced rate. System administrators establish system settings to determine whether order takers are prompted to choose, or able to specify, whether each line item is taxable and at what rate. A reduced rate sometimes applies when the delivery is made outside the tax district. Order takers can be prompted when each product is entered, or just the first time the customer buys the product.
To control a line item's taxability:
Create or open a sales order and display the order's Body tab.
If prompted when entering a product, specify how the item is taxed:
Yes - Yes, tax the item.
No - No, do not tax the item.
Reduced - Yes, tax the item - but at the reduced rate that is set up.
If prompted, enter or edit the tax code. Press F10 for a list of choices.
From the View menu, select New View > Line Item Taxable View. This view includes columns that display the tax status and tax code for each line item.
To edit a line item's taxability, move the cursor to the TAX field and press F10 to specify one of the following. If editing is disabled, asterisks (*) display in the field.
Yes - Yes, tax the item.
No - No, do not tax the item.
Red - Yes, tax the item - but at the reduced rate that is specified or set up.
To edit a taxable item's tax rate, press F10 in the TaxCode field and specify a tax code. The tax code you specify here overrides other tax settings.
When you are satisfied with each line item's tax settings, proceed with the order as usual.
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