Defining Product Tax Relationships

A product tax relationship is a combination of an account category, delivery method, and tax product code, and is used to determine the tax amount on a product or maintenance contract. The tax product is used during product contract invoice processing to identify the appropriate tax rate for the product. Product tax relationships override both the bill-to and ship-to addresses when determining tax amounts.

To define a product tax relationship

  1. Access Product Tax Relationships (BR58.1).
  2. Use the following guidelines to enter field values for each product tax relationship.
    Acct Cat (Account Category)

    Type or select the account category for which you are creating the product tax relationship. This must be a revenue account category.

    Delivery Method

    Select the delivery method for the product tax relationship. This frequently impacts the taxability of a product or service differently in various tax locales. Valid options are:

    • S (Shipped)

    • H (Hosted)

    • E (Electronic)

    • L (Loaded)

    • 1, 2, or 3 (user-defined)

    Tax Product

    Type an identifier for this product tax relationship. This field's value will be identified using the Account Category and Delivery Method and interfaced into the tax system.

    Effective Date

    Type the date on which this product tax relationship is effective. The most current record will be used with a date equal to or before the trans date.

  3. Select the Add form action to create the product tax relationship.
  4. If you use the Lawson Tax application, tax relationships defined on this form must also be defined as exception on Category Override Tax Rates (TX03.2). Tax relationships are interfaced to the Lawson Tax (TX) system during invoice processing and used to identify the appropriate tax rate for the product's delivery method.