Tax adjustment prerequisites

If a customer order has incorrect tax amounts due to an improper Geo code, or if an incorrect exemption certificate was applied, you can correct the amount in Sales Order Entry.

Use the instructions for correcting the customer’s account if your customer reports one of these situations:

• They were charged an incorrect amount of sales or use tax on an invoice, or
• They should be exempt from taxes on the order and you are using Sovos's Sales and Use Tax system’s STEP module. These procedures can be performed after you’ve updated STEP with the correct exemption certificate data.
  Note: When you run the Sovos Sales and Use Tax system TIRA/TAX030 report from the Sales and Use Tax system Toolkit or from the UNIX command line, ensure that you set the parameters properly to include labor or service items. Otherwise, any orders entered using the instructions for correcting tax amounts are not included on the TIRA/TAX030 report.

Before you make the correction, verify these records are set up properly:

• Ensure the Tax Adjustment field displays in Sales Order Entry-Advance Line Entry. This field is optional, so use the Personalize feature to add it to the window. When you create a Correction (CR) order type for a Labor product, the Tax Adjustment field is enterable. This loads the Ship From, Ship To, Point of Order Origin (POO), and Point of Order Acceptance (POA) addresses from the original order onto the CR order. The Tax Adjustment field also enables the Tax Interface to calculate taxes at the same rate as the original invoiced order.
• Ensure a Return/Adjust Reason is set up for tax corrections in SA Table Code Value Setup.
• Create a labor product in Product Setup and Product Warehouse Product Setup named “Tax Adjustment”.
• Review the customer’s account to find all invoices the customer is requesting tax credits for.
• Verify the POA Tax Type and POO Tax Type options are set correctly in SA Company Setup.