Tax Code
Select the tax code to use to calculate the taxes on this invoice for Tax System 1. The field displays all tax codes (both rate and exemption) regardless of the Tax System. You select the correct tax code.
In an area-based tax system, the tax code must be a rate-type tax code. The following formula is used to calculate the tax amount (if the check boxes are selected on theTax Codes form):
Tax Rate (Amount + Misc Charges + Freight)
In an item-based tax system, the tax code can be blank or an exempt-type tax code. If the tax code has a non-zero rate or is blank, it indicates the invoice is taxable. In this scenario, the rates are based on the default AR/AP tax codes from the Tax Systems form. If an Exempt Type Tax Code with a zero rate is set at the header level, tax calculation will take that into consideration, and the tax amount will be zero.
This field is accessible only if the Prompt for [Tax System (1)] check box is selected on the Tax Parameters form. This field defaults from the Customers form. If the Customers form is blank and this is an item-based tax system, the tax code defaults from the AR/AP Tax Code on the Tax Systems form.