Sovos and product codes

A product code is a numeric value assigned to a category of products. Sovos researches the tax laws and defines each product category. These codes are stored in Sovos's Sales and Use Tax Product Taxability file.

The file contains the product code and state combinations for products with non-standard tax rates in any location. You can assign these product codes to a product line or specific product in Distribution SX.e, and the information is passed by Distribution SX.e to the Tax Master file when the sales order line is created in Sales Order Entry. Refer to the Sovos documentation for a listing of product codes.

You can assign a product code to a product line in Product Line Setup-Tax by specifying the code in the Tax Exempt Type field. This value on the product line is used as a default value for Product Warehouse Product Setup when a new Product Warehouse Product Setup record is created in the warehouse of the product line with the vendor of the product line.

Product codes are also used for freight and other addons that may be taxed differently depending on jurisdiction. When you assign product codes to addons, Sovos Sales and Use Tax calculates the tax amount based on the Product Taxability file. The Sales and Use Tax product code, 89999, indicates the charge should always be tax exempt. If you must create an addon that should always be tax exempt, in all jurisdictions, create a tax group 89999 and assign this tax group to the addon in SA Sales Use Taxes Setup-Addons.