Purchasing items with tax

You can define tax defaults, including tax status and tax code, for each inventory and non-stock item in four places: item master file, item location file, requisition header, and purchase order header. The tax status indicates whether the item is taxable. The tax code indicates the tax rate and the type of tax.

When you create a purchase order, the items are taxed according to the tax status and the tax code that are associated with each item. You can apply a tax code after you determine that the item is taxable.

If a tax value exists on both the item master and item location files, then the tax from the item location file is the default. You can use this to regulate the tax status according to its use at each location. When you define tax information at the header level, the tax is applied to any item without an associated tax status and tax code. In other words, only items with a blank tax code on the item master or item location files are overridden.