Sovos and STEP Interface

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

Note: Infor strongly discourages the use of SA Exemption Setup functionality in combination with Sovos. Use of SA Exemption Setup may interfere with how Sovos works; the timing and validation. You should make customers and products taxable, then let Sovos determine any reason why either would not be taxed. Between the Sovos product codes and the tax exemption certificate functionality Sovos GTD provides, you can set up everything necessary to have Sovos 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.

Sovos's STEP system processes and maintains sales and use tax exemption certificates. That information is used to prevent taxes from being calculated on a customer, ship to, or product during sales order entry. You can set up Distribution SX.e to interface with STEP. You must set up your records so that the exemption certificate verification is handled by the STEP system and the correct taxes are calculated by Sovos Sales and Use Tax System where necessary.

To initiate the STEP interface, select one of the STEP Interface options in SA Company Setup-Taxes. The selected option applies when you enter a sales order for any customer. 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.

The Use Defaults option is the most flexible choice for most Distribution SX.e installations; however, your business consultant can help you select the option that best suits your company.

So that STEP controls the taxes on each order, set the taxability to Taxable for all customers and shiptos in Customer Setup or Customer ShipTo Setup, and for all products in Product Warehouse Product Setup. If you encounter a situation where you must make a customer or product exempt in all jurisdictions and you do not want to use STEP, you can set the taxable status to Non Taxable. This forces the transaction to be tax exempt without processing through the STEP module, and the transaction is recorded in the Sovos GTD Sales and Use Tax Audit file as an exempt sale.

You can also indicate whether to use STEP when you enter a Correction (CR) order type in Sales Order Entry by selecting the Use STEP Data option in the Correction page. To access this page in Sales Order Entry-Initiate, select an Order Type of Correction, and click Next.

STEP records created for customer records do not apply to the associated shipto records. You must create separate STEP records for each shipto record for STEP to recognize them and calculate the exemptions accordingly.

Within the STEP application, certain records must be set up so that the Distribution SX.e interface performs correctly. You must complete the key Information section in the STEP application's exemption record setup for each exemption record with data that corresponds to data in Distribution SX.e. This table shows each STEP field and for a description of the matching Distribution SX.e values.


STEP Field	Distribution SX.e
Key=Sales	Select the Sales key option to activate the interface to Distribution SX.e sales order transactions. The Purchases option applies to purchases for consumer use. Distribution SX.e does not currently interface transactions from Accounts Payable or Purchase Orders to the STEP system.
Company ID	Matched to the SA Company Setup company number. This is stored on the sales order.
Customer ID	Matched to the Customer Setup customer number. This is stored on the sales order.
State Code	Matched to the state from the shipping address on the sales order in Distribution SX.e.
Juris Level	Not applicable. No value is passed from Distribution SX.e.
Location	Business location that matches to the warehouse where the Sales Order Entry is placed.
Job #	If used in STEP, the number must match to the Distribution SX.e ShipTo on the sales order. A specific record matching the job number is looked for by the STEP application. If one is not found, a record for the customer with a blank job number is looked for by the STEP application.
Reason Code	Matched to the nontaxable reason code on the sales order in Distribution SX.e. If used, you must set up this reason code in SA Table Code Value Setup-Non Taxable Reason and select this reason when a qualifying product is entered in Sales Order Entry. This is optional.
Occ #	Not applicable. Leave blank. No value is passed from Distribution SX.e.
Product Code	The product code is matched to the Tax Exempt Type in Product Warehouse Product Setup-Taxing to determine if the product is exempt or qualifies for a special tax rate in certain jurisdictions.
Product Code Conversion	This flag is set to Yes when you set up a Tax Exempt Type in Product Warehouse Product Setup-Taxing.