Sales Tax in Consolidated Invoices

Sales tax in a consolidated invoice is calculated when you print and post the pending invoice with the Consolidated Invoicing activity.

Tax codes in the pending invoice are used in the calculation of tax amounts on line items, freight charges, and miscellaneous charges. The tax code for an invoice line item is from the customer order containing the line. Tax codes for freight charges and miscellaneous charges are entered at the invoice header level. The header covers multiple customer orders, which may contain multiple freight tax codes and miscellaneous tax codes.

Note: All customer orders that are part of the consolidated invoice must have the same tax code. If the tax codes are not the same, then the taxes are calculated by using the tax code from the last customer order.

This topic explains how the Consolidated Invoice Generation activity and the Consolidated Invoices Workbench activity select default tax codes for freight and miscellaneous charges.

Note: You can override the default tax codes in the Consolidated Invoices Workbench in the Freight Tax Codes field(s) and the Misc Charges Tax Codes field(s).

Area-based Tax System

For an area-based tax system, default tax codes for freight and miscellaneous charges in a consolidated invoice are derived as follows:

If tax codes are specified on the Tax Systems form in the fields Freight Tax Code and Misc Charges Tax Code, these codes are the default codes in the consolidated invoice. They are exempt-type codes, and tax amounts are not calculated for freight and miscellaneous charges in the invoice.
If tax codes are not specified on the Tax Systems form, default tax codes are from the first customer order in the pending invoice.

Note: For an area-based tax system, tax is calculated on freight and miscellaneous charges if rate-type tax codes are specified on the invoice header and, in the specification for the codes on the Tax Codes form, the Include Freight field or the Include Misc. field, respectively, is selected.

Item-based Tax System

For an item-based tax system, the default tax codes for freight and miscellaneous charges in a consolidated invoice are derived as follows:

If tax codes are specified on the Tax Systems form in the fields Freight Tax Code and Misc Tax Code, these codes are the default codes in the consolidated invoice. They are rate-type codes.
If tax codes are not specified on the Tax Systems form, the tax code specified on the Customer Ship-Tos form for the ship-to record with sequence number 0 is the default tax code for freight and/or miscellaneous charges in the consolidated invoice.

Note: You can preview calculated sales tax amounts in the Consolidated Invoices Workbench.