SA Company Setup - Taxes field descriptions

Fields are presented in alphabetical order within each section.

Tax Settings

Allow Expanded Tax Groups

Tax groups 1-5 are set up in SA Company Setup. Expanded tax groups 6-99 can be set up in SA Table Code Value Setup. Typically expanded tax groups are used for industry taxes. When enabled, industry taxes are calculated during sales order entry. You must enable the use of the expanded tax groups by selecting the Allow Expanded Tax Groups option in SA Setup Company-Taxes-Tax Settings. In addition, the company setting for Tax Interface must be set to System Rates. The Tax Method must be set to Sales Use Tax (SUT).

Direct Order Ship Point

Optionally, you can set the shipping point for direct orders at the company level for taxing purposes. The shipping point can be the vendor’s location or the ordering warehouse. The field, Direct Order Ship Point, allows you to select Vendor or Warehouse. If you select Warehouse, for Direct Order (DO) lines tied to a Purchase Order (PO), or DO orders, taxes are calculated based on the address of the ordering Warehouse instead of the Vendor. Select Vendor to maintain current functionality.

This feature can be used with either Avalara's AvaTax, or Sovos Global Tax Determination (GTD), or Vertex Cloud.

See the Infor Distribution SX.e Integration Guide for AvaTax, or the Infor Distribution SX.e Integration Guide for Sovos Global Tax Determination, or Infor Distribution SX.e Integration Guide for Vertex Cloud.

Tax Analysis

Regardless of Tax Method or Tax Interface, you must select a Tax Analysis method. The method defines how you accrue and report tax liabilities to the government. If your company uses cash basis, you record the sales tax after goods or services are paid for [the Paid Date]. If you use the accrual method, you record sales tax after a sales order is invoiced [by Invoice Date] or rebated [Rebate Date].

For Vertex Cloud, you must select Accrual.

To use a cash basis with AvaTax, you must first contact your Avalara's AvaTax representative.

Before you select Cash, ensure that you are in compliance with national and state laws regarding reporting of sales taxes. If your general accounting is done on an accrual basis and you select Cash, you could create internal inconsistencies.

Be aware that, in conjunction with the automated customer payment reversal feature, the Tax Analysis field must be set to Accrual. Otherwise, the option, Allow AR Payment Reversals, in SA Administrator Options-Customers-Cash Receipts is not available to activate the feature.

If you must collect Value Added Tax (VAT), use this setting to specify when you post tax liabilities to General Ledger and whether to print the SM Government Tax Register Report on a cash or accrual basis. If you select Accrual, tax liabilities are posted to the AR VAT account set up in SA Value Added Tax Setup-Required-VAT Accounts for each jurisdiction’s tax rates when the order is invoiced in the Sales Entry Invoice Processing Report. This means you record the tax amounts on sales orders as a liability as soon as the order is invoiced.

If you select Cash, you do not record the tax amounts from sales orders as a liability until the order is paid by the customer. The amounts posted to the AR Cash Basis account during Sales Order Entry are offset and posted to the Taxes Payable accounts when the invoice is paid during Customer Cash Receipt Entry. This table shows an example of this posting:


	DR	CR
Taxes Accrued	$100.00	X
Taxes Payable	X	$100.00

The account codes for the Taxes Payable shown in the example are set up on the SA Company Setup-Taxes-VAT Settings.

Tax Interface

Select the tax interface you use to calculate sales and use taxes. You can select one of these values:

System Rates: Select this value if you do not use a third-party taxing software; rather, you update and use the tax rates in the System Administrator tax tables in Distribution SX.e.
Sovos - SUT: Select this value if you use Sovos Sales and Use Tax (SUT) Interface rate tables to determine your sales and use taxes.
Sovos GTD: Select this value if you use the Sovos GTD interface.
AvaTax: Select this value if you use the AvaTax interface.
Vertex: Select this value if you use the Vertex Cloud interface.

Tax Method

Select the tax method used by your company. You can select one of these values:

Sales Use Tax (SUT): Select this option if your company is based in the United States and must collect and report sales and use taxes based on sales made in state, county, city, and other jurisdictions in the U.S.
Goods and Services Tax (GST): Select option value if your company is based in Canada and must collect and report goods and services (GST) taxes for jurisdictions in Canada.
Value Added Tax (VAT): Select this option if your business is based in a country that collects VAT, such as the United Kingdom or Mexico.

Based on your tax method, the appropriate tax setup or maintenance fields are displayed in these functions:

Customer Setup-Taxing
Vendor Setup-Taxing
Vendor Invoice Center Entry
Product Line Setup-Tax
Product Warehouse Description Setup-Taxing
Sales Order Entry-Review Taxes and Totals

Note: Sovos GTD uses the Tax Method value instead of the Country value to determine what taxing logic or interface is used when calculating taxes on sales orders and vendor invoices.

Tax Register

This option indicates that you are integrating with a third-party tax compliance application and enables the third-party to store data. During Sales Entry Invoice Processing Report, the SM Government Tax Register Report is updated for each line item and addon. One tax register is updated by all companies. If you do not want the Tax Register updated by this company’s Sales Order Entry transactions, clear this option. This might be the case if you are setting up or modifying a test company. If tax data is not written to the audit file, there is no way to report on the taxes.

Taxware

Apply AP Taxing

The Sovos GTD interface supports tax calculations for both customer [Accounts Receivable] and vendor [Accounts Payable] functions. You must select the option, Apply AP Taxing, to activate AP tax processing. This option allows the Vendor Invoice Center Entry function to correctly collect, record, and post tax liabilities and credits in Vendor Invoice Center Entry and General Ledger. If you activate AP processing, you must set up your AP Tax liability and expense accounts in General Ledger and then specify these in SA Company Setup-Taxes-Additional Settings. Depending upon your company’s tax analysis method, cash or accrual, you must set up GL accounts to post tax liabilities to an AP Tax or AP Cash GL account. If you activate AP processing, taxes are calculated in several functions.

Sovos GTD taxing logic is applied only to the costing of an invoice, a miscellaneous credit, a credit memo, a debit memo, a manual payment, and a reversal. Sovos GTD is not applied to the costing of a service charge, a rebate, unapplied cash, or a COD.

Geo Interface

If you are integrated with Sovos GTD - SUT, select this value only if you use a third-party tax code validation package, such as Verazip or GeoCoder. If you use one of these applications, but you perform the interface in non-update mode, do not select this value. If you are integrated with Sovos GTD, clear this option. Geo code functionality is included with Sovos GTD.

POA Tax Type

If you are integrated with Sovos - SUT, indicate the point of order acceptance value to use to autofill the Sales and Use Tax system. The Point of Order Acceptance (POA) is the location where the vendor contractually accepts the order for goods or services. For Accounts Receivable processing, this field is populated with the Ship From address, the Ship To address, or the company call center address. This field does not apply to Accounts Payable processing. The POA will always be the vendor’s address in Vendor Setup, Vendor Ship From Setup, or the ship from address specified on the purchase order header. This setting is also used in TI Administrator Tax Jurisdiction to indicate the address information that is passed to Sales and Use Tax to determine the jurisdiction used by the calculator.

This table shows that values you can select for this setting:


Value	Description
Ship To	The Customer Setup or Customer Ship To Setup address is used to determine taxing jurisdictions. This is the default.
Ship From	The Product Warehouse Description Setup address is used to determine taxing jurisdictions. This is the default, except under these conditions: If the line is tied to a DO PO, the vendor’s address is used as the ship from address. If the line is tied to a DO WT, the address of the shipping warehouse is used as the ship from. When the tax jurisdiction is determined for an entire invoice, lump sum billing, or addons on an sales order Direct Order, the Sales Order Entry header is checked for any tie information for a specific vendor or warehouse. If so, the address of the vendor or warehouse is used as the ship from address. If the order is a Direct Order, and the default sourcing is ARP, no vendor or warehouse is stored on the Sales Order Entry header. In this case, the address of the shipping warehouse is used.
Call Center	The SA Company Setup address is used to determine taxing jurisdiction. If selected, you must verify all Sales Salesrep Setup records for the correct address and geo code setup. If any jurisdiction data is incomplete or does not exist, the tax calculation fails.
Blanks	We recommend that you do not select Blanks. If you select Blanks, contact a third-party tax service provider, such as Sovos GTD, to assist you in setting up all nexus information.

POO Tax Type

If you are integrated with Sovos GTD - SUT, , indicate the point of order origin value to use to autofill the Sales and Use Tax System. The Point of Order Origin (POO) is the location where the vendor initially took the order for goods or services. For Accounts Receivable processing, this field is populated with the Ship From address, the Ship To address, or the company (call center) address. This field does not apply to Accounts Payable processing. This setting is also used in TI Tax Jurisdiction Administration to indicate the address information that is passed to Sales and Use Tax to determine the jurisdiction used by the calculator.

STEP Interface

STEP (Sales Tax Exemption Processing) is an optional third-party application you can purchase separately to use with Sovos GTD and Distribution SX.e. Contact your Sovos GTD representative for more information.

Note: Infor strongly discourages the use of SA Exemption Setup functionality in combination with Sovos GTD. Use of SA Exemption Setup may interfere with how Sovos GTD works; the timing and validation. You should make customers and products taxable, then let Sovos GTD determine any reason why either would not be taxed. Between the Sovos GTD product codes and the tax exemption certificate functionality Sovos GTD provides, you can set up everything necessary to have Sovos GTD correctly determine the taxability. This is especially true with how addons are handled. You can set the addon taxability to Exemption, but there is no way to specify the Tax Exempt Type value in SA Exemption Setup against the addon. Therefore, before to using them simultaneously, we recommend you engage Infor Consulting Services (ICS) to help plan your implementation.

The options and a description of each are shown in this table:


STEP Interface Option	Description
Don’t Use	The STEP interface is not activated.
Use Defaults	Select this option to activate the STEP interface and use the default record when searching for a matching exemption certificate. If a certificate with matching key information and reason code is not found by STEP, the first record with matching information is used by the STEP system.
No Defaults	Do not use a default record when searching for a matching exemption certificate. If a certificate with matching key information is not found by STEP, the order is not considered exempt and is taxed. If a job number exists in Customer ShipTo Setup-Job, the job number overrides the reason code.
Use Product	The STEP database is searched for certificates with matching key information and for a list of products included or excluded. This option enables you to know if the product should be exempt or taxed at the regular rate.
Use Customer	The STEP database is searched for certificates with matching key information. The default customer is accepted. If an exact match to key information is not found, the database is searched for a certificate that has default in the STEP Customer ID field.

AvaTax

Address Validation

Select this option to enable the Address Validation pop-up window feature. Sign out and sign back in to Distribution SX.e to activate this setting.

Apply AP Taxing

The AvaTax interface supports tax calculations for both customer [Accounts Receivable] and vendor [Accounts Payable] functions. You must select the option, Apply AP Taxing, to activate AP tax processing. This option allows the Vendor Invoice Center Entry function to correctly collect, record, and post tax liabilities and credits in Vendor Invoice Center Entry and General Ledger. If you activate AP processing, you must set up your AP Tax liability and expense accounts in General Ledger and then specify these in SA Company Setup-Taxes-Additional Settings. Depending upon your company’s tax analysis method, cash or accrual, you must set up GL accounts to post tax liabilities to an AP Tax or AP Cash GL account. If you activate AP processing, taxes are calculated in several functions. For cash basis in AvaTax, you must first contact your AvaTax representative.

Point of Acceptance: Select Ship To to indicate the customer.

Point of Origin: Select Ship From to indicate you, the distributor.
Tax Organization By Warehouse: With the AvaTax integration, you can optionally define multiple company codes at the warehouse level. For example, most of your company may be registered to collect tax in multiple states, but a particular warehouse location is a separate tax entity with the IRS and state tax board. You can set up an AvaTax profile for that warehouse. Then, enable the Tax Organization By Warehouse option in SA Company Setup-Taxes-AvaTax. Next, specify the warehouse company code the Tax Organization Name field in Product Warehouse Description Setup-Taxing. When enabled, during a taxing call, the warehouse's Tax Organization Name is sent to AvaTax. If no Tax Organization Name is specified in the warehouse record, the Tax Organization Name specified in SA Administrator Options-Integrations-Tax Interface Options-Tax Interface Company Settings is used.
Note: As a prerequisite, you must also set up an AvaTax profile and warehouse company code for that warehouse.

See the Infor Distribution SX.e Integration Guide for AvaTax.

Vertex

Address Validation

Select this option to enable the Address Validation pop-up window feature. Sign out and sign back in to Distribution SX.e to activate this setting.

Administrative Destination

Select Ship To to indicate the customer.

Administrative Origin

Select Ship From to indicate you, the distributor.

Apply AP Taxing

The Vertex Cloud interface supports tax calculations for both Customer (Accounts Receivable) and Vendor (Accounts Payable) functions. Select the option Apply AP Taxing to activate AP tax processing. This option allows the Vendor Invoice Center Entry function to correctly collect, record, and post tax liabilities and credits in Vendor Invoice Center Entry and General Ledger. If you activate AP processing, you must set up your AP Tax liability and expense accounts in General Ledger and then specify these in the Additional Settings section in SA Company Setup-Taxes. Depending upon your company’s tax analysis method, cash or accrual, you must set up GL accounts to post tax liabilities to an AP Tax or AP Cash GL account. If you activate AP processing, taxes are calculated in several functions. For Vertex Cloud, you must use accrual.

Note: If your company is based in Canada, set up your GL accounts for posting tax liabilities for non-expense invoices in the ITC Account field for GST tax and the PST Account for PST tax in the GST/PST Settings section. GST and PST tax liabilities associated with an expense invoice are posted to the account specified in the AP Tax Expense field.

Tax Organization By Warehouse

With the Vertex Cloud integration, you can optionally define multiple company codes at the warehouse level. For example, most of your company may be registered to collect tax in multiple states, but a particular warehouse location is a separate tax entity with the IRS and state tax board. You can set up an Vertex Cloud profile for that warehouse. Then, enable the Tax Organization By Warehouse option in SA Company Setup-Taxes. Next, specify the warehouse company code the Tax Organization Name field in Product Warehouse Description Setup-Taxing. When enabled, during a taxing call, the warehouse's Tax Organization Name is sent to Vertex Cloud. If no Tax Organization Name is specified in the warehouse record, the Tax Organization Name specified in SA Administrator Options-Integrations-Tax Interface Options-Tax Interface Company Settings is used.

Note: As a prerequisite, you must also set up an Vertex Cloud profile and warehouse company code for that warehouse.

See the Infor Distribution SX.e Integration Guide for Vertex Cloud.

Tax Group Names

1-5

Tax Groups are special codes that identify special taxing needs. They are product- or addon-related. You can use a tax group to address the taxing needs of a product, such as a luxury tax, a hazardous waste tax, or a tax exemption, or an addon, such as freight and handling. Some tax group names may be dictated by a third-party tax software product codes or by Canadian taxing.

In Sales Use Tax, tax groups are used in conjunction with company, product/addon, customer, sales, and tax records to calculate and apply the appropriate tax during Sales Order Entry, and to update General Ledger. Therefore, tax groups must be set up correctly to ensure the tax groups are available to the other modules and that calculations are accurate.

Initiate the setup of tax groups in SA Company Setup. Tax Group Name 1 must be named and created first and should establish a base of taxing information. The first group of rates must always be the standard rate that is applied to the majority of items or purchases. Name the standard group in SA Company Setup, then define the standard master, amounts, rates, and taxing jurisdiction in SA Sales Use Tax Setup.

If you are integrated with Sovos GTD, use the Tax Groups section if you have addons that are non-taxable in some jurisdictions. Tax Group 1 should be reserved for the standard tax group. Create a Tax Group 2, 3, 4, or 5 labeled using the appropriate product code, such as freight charges, which have a product code of 40000. That number should be used as a description for one of the tax groups. Refer to your Sovos GTD documentation for a listing of product codes.

If you are integrated with AvaTax or Vertex Cloud, do not use groups 2-5.

If your company uses Value Added Tax (VAT), you can indicate whether a tax group is exempt. Specify whether a tax group is exempt by selecting the corresponding VAT Exempt option. The VAT Exempt options are only available if you have selectedValue Added Tax (VAT) in Tax Method.

Sales Use Settings

These settings are displayed if Tax Method is set to Sales Use Tax (SUT).

1099 Name: The company name from the Required view autofills this field. If the company name is longer than 30 characters, the name is truncated. The 1099 name you specify should be the company name as you require this number to be displayed on the 1099 Form and wherever a remit to name is used.
AP Tax: Specify the GL account used to track use taxes paid by the company when purchasing products, and taxes are posted on an accrual basis. This account is used if your Tax Method is Sales Use Tax (SUT). Your Tax Interface must be one of these options: AvaTax, Sovos, or Vertex Cloud. You must also be using that interface functionality in the AP modules; that is, the Apply AP Taxing option is selected.
AP Tax - Cash: Specify the GL account used to track use taxes paid by the company when purchasing products, and taxes are posted on a cash basis. This account is used if your Tax Method is Sales Use Tax (SUT), and your Tax Interface is Sovos, and the Sovos functionality is used in the AP modules; that is, the Apply AP Taxing option is selected.
Federal Tax ID #: Specify your company’s Federal Tax ID number.

GST/PST Settings

The fields in this section are available if you maintain a company based in the Canada. The Tax Method in the Tax Settings section must be Goods and Services Tax (GST) to maintain these fields.

GST Account: Specify the General Ledger (GL) account used to track Goods and Services Tax (GST) taxes collected by the company when selling products and taxes are posted on an accrual basis. You must set up this account code in GL Account Setup before specifying the account number here. If you then change this account, you must also change the account in each related SA Local Tax Setup record. If this Canadian customer is using cash accounting, you must specify an account number in this field. If you leave this field blank, suspense postings may occur.
GST Account - Cash: Specify the GL account used to track GST taxes collected by the company when selling products and taxes are posted on a cash basis.
GST Rate: Specify the GST rate for your company based in Canada. This rate is used in Sales Order Entry to calculate taxes due on sales to your customers. This value is also used if the Tax Method is Goods and Services Tax (GST) and the Tax Interface is System Rates.
GST Registration #: Specify your company’s GST registration number.
ITC Account: Specify the Input Tax Credit (ITC) GL account code for this company. Accounts Payable uses this account to track all GST paid by your company when it purchases products. You must set up this account code in GL Account Setup before specifying the account number here.
ITC Account - Cash: Specify the Input Tax Credit (ITC) account used to track GST taxes paid by the company when purchasing products and taxes are posted on a cash basis.
PST Account: Specify the Provincial Sales Tax (PST) GL account code for this company. Accounts Payable uses this General Ledger account to post all Provincial Sales Taxes (PST) you pay on goods your company consumes for its own use. If you purchase products for resale, PST is not collected. Some charitable and other organizations are exempt from paying PST; however, this is a rare exception. You must set up this account code in GL Account Setup before specifying the account number here.
PST Account - Cash: The GL account used to track Provincial Sales Taxes (PST) taxes paid by the company when purchasing products and taxes are posted on a cash basis.

VAT Settings

These settings are displayed if Tax Method is set to Value Added Tax (VAT).

AP VAT: Specify the account code you have set up in General Ledger to track VAT paid for products and you are posting your tax liabilities on an accrual basis. This account is used only if your Tax Method is Value Added Tax (VAT). If you are using a third-party tax application, you must also select the option Apply AP Taxing in SA Company Setup-Taxes.
AP VAT - Cash: Specify the account code you are set up in General Ledger to track Value Added Tax (VAT) paid on products and you are posting your tax liabilities on a cash basis. This account is used only if your Tax Method is Value Added Tax (VAT). If you are using a third-party tax application, you must also select the option Apply AP Taxing in SA Company Setup-Taxes.
HMRC API URL: If you submit Value Added Tax (VAT) to Her Majesty’s Revenue and Customs (HMRC), you are required to use digital reporting. As part of the activation process for VAT digital tax functionality, you must specify the URL specified in SA Application Integration Endpoint Setup. You can confirm that the URL that is specified can access the HMRC API with the Test Connection button.
Settlement Discount Tax: A settlement discount is an additional discount that is granted to a customer in return for prompt payment. Use this option to specify whether settlement discounts are calculated Net or Gross of VAT. In the UK, most companies calculate settlement discounts net of VAT, or as a pre-tax discount. Companies based outside of the UK will likely not use this; in that case, we recommend you specify Gross.
VAT Registration #: Specify your company’s VAT registration number. If you are using a third-party tax application, this should match the VAT registration number recorded in that application.
Use HMRC Digital Reporting: If you submit Value Added Tax (VAT) to Her Majesty’s Revenue and Customs (HMRC), you are required to use digital reporting. As part of the activation process for VAT digital tax functionality, you must select this option.

Additional Settings

AP Tax - Expense: When posting taxes calculated in the AP modules to the General Ledger, some situations require another account to complete the credit or debit postings. Specify the GL account to use when creating balancing postings for tax amounts that are due on expensed invoices.
AP Tax - Self-Assess: If your vendors do not have nexus to collect taxes in the jurisdictions in which they are taxed, you may be required to pay the tax due directly to the jurisdictions as self-assessed Value Added Tax (VAT). Specify the GL account used to track taxes you must pay directly to the jurisdictions.
AP Tax - Tolerance %: When calculating taxes in Vendor Invoice Center Entry, there may be slight differences between the taxes on the AP invoice from the vendor and the taxes calculated by the system or a third-party tax application. This difference could be due to rounding. By specifying a tolerance percentage, you can skip steps during invoice entry to show the tax amounts from the AP invoice compared to the calculated tax amounts.