About Drop-Ship Locations and Taxes on Customer Order Lines

When you add a drop ship customer to a customer order line item, the system compares the tax code of the drop ship customer, the tax code of the existing customer, and the tax code of the CO line, item to determine if the line item tax code needs to be changed.

In an area-based system, the CO line item tax code is changed to the tax code of the newly added drop ship customer, if the tax code of the newly added drop ship customer is different from the tax code of the original customer. However, if the tax code of the CO line item is a rate type tax code and the newly added drop ship tax code is equal to the original customer's tax code, the system erases the line item tax code.

In an item-based tax system, if the tax code of the newly added drop ship customer is different from the tax code on the CO line item, then the CO line item tax code is changed to the tax code specified in the Tax Codes for Items by Jurisdiction file. This record is retrieved based on the item number entered for this line item and the jurisdiction of the Exempt Code on the drop ship customer.

Note: This action is taken only if the Exempt Code on the drop ship customer has a non-zero rate, the jurisdiction is non-blank, and a record exists in the Item Tax Codes by Jurisdiction file.

The system asks you whether the tax code at the CO line item should be overridden with the drop ship tax code. To leave the tax code as is, answer No. To have the tax code on the CO line item changed, answer Yes. If the Prompt on Line Item check box on the Tax Systems form is cleared, you will not receive a query. However, the tax code is still changed.