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Sales Tax Rates and Hierarchy

Contents

  1. Enterprise Purchasing
  2. Enterprise Purchasing Receipts
  3. Sales Tax
    1. Commercial Sales Tax
      1. Commercial Labor
      1. Commercial Parts
      1. Commercial Misc.
      1. Commercial Post-processing Sales Tax Rules
    1. Labor Sales Tax
    1. Parts Sales Tax

Sales tax rates may be applied in multiple areas in the Application. To determine the applicable sales tax rates, the Application follows the hierarchy outlined below based upon your Enterprise Purchasing management method.

The hierarchy follows logic rules determined by the options selected on the Currency/Sales Tax Setup tab of the Data > Setup > Options screen. For more in-depth information on these options, please review the Currency/Sales Tax Setup topic.

Enterprise Purchasing

The hierarchy for purchasing managed BY ENTERPRISE proceeds according to this logic:

  1. If the Sales tax computed automatically for option's Parts Receipts box is not checked, then the sales tax rate is set to 0.
  2. If the Sales tax computed automatically for option's Parts Receipts box is checked and the Compute sales tax by vendor option is not checked, then the system Sales tax rate is used.
  3. If the Sales tax computed automatically for option's Parts Receipts box is checked and the Compute sales tax by vendor option is checked, then:
    1. If a tax rate is defined for the vendor location, then the sales tax rate for the vendor and location combination is used.
    2. If a tax rate has not been defined for the vendor location, the vendor primary sales tax rate is used.
    3. If a tax rate has not been defined for either vendor location or vendor primary sales tax and the Sales tax added by location for Parts Receipts option is checked, then the rate is set  using the Sales Tax based upon the part location.
    4. If the Sales Tax rate is still 0 based upon the previous attempts to set it, then the system Sales tax rate is used.
  4. If the Sales tax computed automatically for option's Parts Receipts box, the Compute sales tax by vendor option, and the Sales tax added by location for option's Parts Receipts box are checked, then:
    1. If the purchasing location does not contain a sales tax rate, then the system Sales tax rate will be used.

The vendor sales tax rate only applies to STOCK PART, NON-STOCK PART, and EXTERNAL REBUILD line items.

Enterprise Purchasing Receipts

Sales tax is set to the enterprise purchasing line item’s sales tax.

Sales Tax

The hierarchy for Sales Tax for labor and parts posting proceed according to the logic in the following sections.

Commercial Sales Tax

Commercial Labor

If the Sales tax computed automatically for option's Commercial labor box is checked, then the Labor cost taxable option is automatically selected. For more information on this worfklow, please see the Currency/Sales Tax Setup topic.

The following logic then applies:

Work Order Commercial Posting
  1. The Work Order location's Sales tax rate by individual location value from the Location screen, Rates and Markups tab is used, if not zero (0).
  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.
Direct Commercial Posting
  1. The Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  2. If step 1 is zero, then the system Sales tax rate is used.
Vendor Tickets
  1. If the Vendor Ticket screen, Tasks tab's Current Location field contains a value, then that location's Sales tax rate by location value is used, if not zero. 

    The Labor cost taxable option is a hidden field on the Vendor Invoices screen, Line Items tab.

  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.
Vendor Invoices
  1. If the Vendor Invoices screen, Line Items tab's Total tax field has been set manually, then that value is used. 

    The Labor cost taxable option is a hidden field on the Vendor Invoices screen, Line Items tab.

  2. If step 1 has not been set manually, then the Total tax field is calculated by:
    1. Direct Equipment Invoice:
      1. The Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
      2. If step a is zero, then the system Sales tax rate is used.
    2. All other Invoice Types:
      1. The Line Item's Work Order location's Sales tax rate by individual location value from the Location screen Rates and Markups tab is used, if not zero (0).
      2. If step a is zero, the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
      3. If step b is zero, then the system Sales tax rate is used.

Commercial Parts

If the Sales tax computed automatically for option's Commercial parts box is checked, then the Parts cost taxable option is automatically selected. For more information on this worfklow, please see the Currency/Sales Tax Setup topic.

The following logic then applies:

Work Order Commercial Posting
  1. The Work Order location's Sales tax rate by individual location value from the Location screen Rates and Markups tab is used, if not zero (0).
  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.
Direct Commercial Posting
  1. The Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  2. If step 1 is zero, then the system Sales tax rate is used.
Vendor Tickets
  1. If the Vendor Ticket screen, Tasks tab's Current Location field contains a value, then that location's Sales tax rate by location value is used, if not zero. 

    The Parts cost taxable option is a hidden field on the Vendor Invoices screen, Line Items tab.

  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.
Vendor Invoices
  1. If the Vendor Invoices screen, Line Items tab's Total tax field has been set manually, then that value is used. 

    The Parts cost taxable option is a hidden field on the Vendor Invoices screen, Line Items tab.

  2. If step 1 has not been set manually, then the Total tax field is calculated by:
    1. Direct Equipment Invoice:
      1. The Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
      2. If step a is zero, then the system Sales tax rate is used.
    2. All other Invoice Types:
      1. The Line Item's Work Order location's Sales tax rate by individual location value from the Location screen, Rates and Markups tab is used, if not zero (0).
      2. If step a is zero, the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
      3. If step b is zero, then the system Sales tax rate is used.

Commercial Misc.

If the Sales tax computed automatically for option's Commercial misc box is checked, then the Misc cost taxable option is automatically selected. For more information on this worfklow, please see the Currency/Sales Tax Setup topic.

The following logic then applies:

Work Order Commercial Posting
  1. The Work Order location's Sales tax rate by individual location value from the Location screen, Rates and Markups tab is used, if not zero (0).
  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.
Direct Commercial Posting
  1. The Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  2. If step 1 is zero, then the system Sales tax rate is used.
Vendor Tickets
  1. If the Vendor Ticket screen, Tasks tab's Current Location field contains a value, then that location's Sales tax rate by location value is used, if not zero. 

    The Misc cost taxable option is a hidden field on the Vendor Invoices screen, Line Items tab.

  2. If step 1 is zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
  3. If step 2 is zero, then the system Sales tax rate is used.

Commercial Post-processing Sales Tax Rules

The following rules apply to all commercial postings processed by the system.

Commercial Issuing
  1. If the Labor cost taxable, Parts cost taxable, or Misc cost taxable option(s) are checked, then:
    1. If the posting's respective Sales tax rate contains a value greater than zero, the value is applied.
    2. If the posting's respective Sales tax rate is zero, the location's Sales tax rate tax by individual location option's values are applied if greater than zero.

      For a Work Order, the Work Order Location is used. For a non-Work Order with an assigned Equipment ID, the Assigned Repair Location is used.

    3. If the location's Sales tax rate tax by individual location option's values are zero, then the Vendor's Sales tax rate from the Vendors > Basic Info screen is used, if not zero.
    4. If the Sales Tax rate is still 0 based upon the previous attempts to set it, then the system Sales tax rate is used.

Labor Sales Tax

If the Sales tax added by location for option's Labor box is checked, then:

  1. For a labor posting on a work order, the Work Order ID location’s sales tax rate is used.
  2. For a direct labor posting on a work order, the employee’s Assigned Shop location ID location's sales tax rate is used.

Parts Sales Tax

If the Sales tax added by location for option's Parts is checked and the Work Order ID location or the Issuing location ID location contain a sales tax rate, then that rate is used.

For more information on which location will be used, please see the Source location of parts markup option on the Shop Activity - Setup - Options screen, Rates and Markups tab.

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