2246484 - How to Setup a Different Tax Rate for Product and Services - US Scenario With Tax Jurisdictions

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2246484 - How to Setup a Different Tax Rate for Product and Services - US Scenario With Tax Jurisdictions

Symptom

You need to setup a different tax rate (different tax rate type) for a product or service that according to a legal requirement should have a special rate on US.

Reproducing the Issue

You need to charge Sales and Use Tax for invoices that will have a discount - for instance, in California you can charge less tax for BOE has some exceptions for manufacturing items depending how they will be consumed.

This special rate will be applied on State level. On County level tax rate should be the same.

Here is how you should setup this scenario.

Resolution

This process consists on 2 sets of settings you should do.

1 - On Tax settings you will need to add an entry for the special rate on Sales Tax Rate Schedules

2 - On Product master data you will assign the special tax type

Here is the details about how to configure these 2 settings:

Create new tax rate type:

1. Go to Business Configuration work center
2. Go to Implementation Projects view
3. Select the relevant project
4. Click on Open Activity List
5. Go to Fine-Tune tab
6. Show - All activities and search for Tax on Goods and Services - US
7. Click on Define Sales Tax Rate Schedules
8. Create a new row for the tax jurisdiction code with tax rate type different from 1 - Standard, define tax rate and validity

Assign tax rate type to product:

1. Go to Product Data work center
2. Go to Materials view
3. Select the material which will have the newly created Tax Rate Type and click on Edit
4. On tab Taxes add a row for country US, State, Tax Type: 1 - Sales and Use Tax and Tax Rate Type as defined on Tax Rate Schedule

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Optionally: you can create a Product Tax Classification category to assign several products to same tax settings as defined on Sales Tax Rate Schedules:

Create a Product Tax Classification:

1. Go to Business Configuration work center
2. Go to Implementation Projects view
3. Select the relevant project
4. Click on Open Activity List
5. Go to Fine-Tune tab
6. Show - All activities and search for Tax on Goods and Services - US
7. Click on Product Tax Classification
8. Add a new row with the combination of Product Tax Category + Description + Product Type 
9. On Assigned Tax Classification, add a row for combination of State + Tax Type (1 - Sales and Use Tax) + Tax Rate Type (created on Tax Rate Schedule)

Assign the Product Tax Classification to products:

1. Go to Product Data work center
2. Go to Materials view
3. Select the material that will be assigned to the newly created product tax classification (max 999 materials)
4. Select Mass Change button
5. Select General in Show field
6. Select Personalize and choose This Screen
7. Check the visible check box for Product Tax Category for US and select Save button
8. Close the Personalize side bar
9. Now you will be able to find the column Product Tax category for US and change the value of it on Mass Change

Keywords

KBA , SRD-CC-FED , Feeds , How To

Product

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