Payment Terms and Taxes
Greg
I'm writing a customization for tax calculation, and have started to dive
into the tricky business of terms discounts. There is some strange behavior
in the native GP tax calculation which I believe to be wrong, and would like
to get some input on it.
This occurs in both the SOP module and Project Accounting. This is also
assuming you have checked the "Calculate Terms Discount Before Taxes"
checkbox on the Company Setup Options window.
Let's say you have an invoice with a single line item of $1000 and a freight
charge of $100. Set up a terms discount called TEN, which is 10% on Freight
and Miscellaneous only. Leave Sale/Purchase unchecked on the Payment Terms
for this terms discount. Let's keep it simple and say tax for the given
invoice is 5%.
Now, based on my understanding on how terms discount works, we should see
total terms discount amount of $10, and total tax of $54.50. The tax is $50
for the line, which has no terms discount applied, and $4.50 (instead of $5)
for the freight, which has a 10% discount applied.
If I open the Sales Payment Terms Entry window, I see the terms discount is
$10, as expected. However, the GP tax calculation engine is still applying
the 10% terms discount to the line, and coming up with $45 in tax.
Note that if I switch it up, and check the "Sale/Purchase" checkbox and
un-check the freight/misc, I get the result I'd expect. Terms discount is
calculated for the line, but not the freight/misc, and the tax amounts
reflect this.
Is this an issue with the GP calculation engine, or is there something I'm
missing?
Typically, we simply mimic GP behavior in our tax solutions. If this is a
stock GP issue, this seems like a case where we'd want to do it right,
regardless of how stock GP behaves. Would you agree?
Thanks,
Greg
RS
I created a sales invoice for a customer and added an item for $1000
and added $100 in freight charges.
Added a payment terms for 10% discount for first 10 days on Freight
and Misc charges only.
On taxes, I tried following on this Invoice:
1) Selected a Shipping Method of Pickup for this customer which
automatically added a tax schedule of USASTCITY-6* (total 7%) to the
invoice.
2) Changed the item's tax option from taxable to Based on Customers.
3) Reviewed the taxes in the tax detail window.
I reviewed the distribution for this invoice and it looked like this:
1) Credit Sales for $1000
2) Credit Taxes for $77
3) Credit Freight for $100
4) Debit Receivables for $1167
5) Debit Discount Available for $10
It appears to be working. I am guessing there is something else going
on with your tax setup. Hope this helps. Thanks, VJ
Greg
should be taxed? $77 in tax would be 7% of the full $1100.
Have you checked the "Calculate Terms Discount Before Taxes" option on the
Company Setup Options form?
"RS" wrote:
> .
>
RS
Terms Discount Before Taxes" to see if it does what you need. I
analyzed the distribution and it seemed a little off but I would let
you try and see if it makes sense to you. Hope this helps.
RS
On Jul 21, 5:33 pm, RS <rutvijrs...@gmail.com> wrote:
> Try marking the "Calculate Tax Rebates" and un-mark the "CalculateTermsDiscount BeforeTaxes" to see if it does what you need. I
> analyzed the distribution and it seemed a little off but I would let
> you try and see if it makes sense to you. Hope this helps.
>
> On Jul 21, 10:13 am, Greg <G...@discussions.microsoft.com> wrote:
>
>
>
> > Shouldn't the tax be $76.30 in your scenario, since only $90 of the freight
> > should be taxed? $77 in tax would be 7% of the full $1100.
>
> > Have you checked the "CalculateTermsDiscount BeforeTaxes" option on the
> > Company Setup Options form?
>
> > "RS" wrote:
> > > I just tried this in Fabrikam and it seems to work on GP 10.
>
> > > I created a sales invoice for a customer and added an item for $1000
> > > and added $100 in freight charges.
> > > Added apaymenttermsfor 10% discount for first 10 days on Freight
> > > and Misc charges only.
>
> > > Ontaxes, I tried following on this Invoice:
> > > 1) Selected a Shipping Method of Pickup for this customer which
> > > automatically added a tax schedule of USASTCITY-6* (total 7%) to the
> > > invoice.
> > > 2) Changed the item's tax option from taxable to Based on Customers.
> > > 3) Reviewed thetaxesin the tax detail window.
>
> > > I reviewed the distribution for this invoice and it looked like this:
>
> > > 1) Credit Sales for $1000
> > > 2) CreditTaxesfor $77
> > > 3) Credit Freight for $100
> > > 4) Debit Receivables for $1167
> > > 5) Debit Discount Available for $10
>
> > > It appears to be working. I am guessing there is something else going
> > > on with your tax setup. Hope this helps. Thanks, VJ
>
> > > On Jul 19, 3:35 pm, Greg <G...@discussions.microsoft.com> wrote:
> > > > Hello,
>
> > > > I'm writing a customization for tax calculation, and have started to dive
> > > > into the tricky business oftermsdiscounts. There is some strange behavior
> > > > in the native GP tax calculation which I believe to be wrong, and would like
> > > > to get some input on it.
>
> > > > This occurs in both the SOP module and Project Accounting. This is also
> > > > assuming you have checked the "CalculateTermsDiscount BeforeTaxes"
> > > > checkbox on the Company Setup Options window.
>
> > > > Let's say you have an invoice with a single line item of $1000 and a freight
> > > > charge of $100. Set up atermsdiscount called TEN, which is 10% on Freight
> > > > and Miscellaneous only. Leave Sale/Purchase unchecked on thePaymentTerms
> > > > for thistermsdiscount. Let's keep it simple and say tax for the given
> > > > invoice is 5%.
>
> > > > Now, based on my understanding on howtermsdiscount works, we should see
> > > > totaltermsdiscount amount of $10, and total tax of $54.50. The tax is $50
> > > > for the line, which has notermsdiscount applied, and $4.50 (instead of $5)
> > > > for the freight, which has a 10% discount applied.
>
> > > > If I open the SalesPaymentTermsEntry window, I see thetermsdiscount is
> > > > $10, as expected. However, the GP tax calculation engine is still applying
> > > > the 10%termsdiscount to the line, and coming up with $45 in tax.
>
> > > > Note that if I switch it up, and check the "Sale/Purchase" checkbox and
> > > > un-check the freight/misc, I get the result I'd expect. Termsdiscount is