Issue/Symptom/Question

How do Tax Jurisdictions default on Purchase Orders? 

Applies To

PENTA for Windows

Purchasing > Purchase Order Grid Option

Resolution/Fix/Answer

If the 'Taxable?' field on the Primary tab of the Purchase Order Grid Option window is set to:

• •  Taxable
    • Tax will be based on the PO Ship To Address
    • If Tax Jurisdictions and Rates are setup and linked to postal codes, the State Code and Postal Code combination will look to find a Tax Jurisdiction match and use that on ALL line items, regardless of the line item's cost distribution
    • Tax Jurisdictions can be overridden line item by line item
  • Tax Per PO Line Distribution (see examples and Hierarchy below)
    • Tax will be determined at a line item level, not a Purchase Order level
    • Tax Jurisdictions will default based on the line item's cost distribution
      • If the Line Item is assigned to a Job, the Job's Tax Jurisdictions will default to that line item, unless 
        • the Ship To Address was changed on the PO
        • Costcode Tax Rule Maintenance has Jurisdictions assigned to a Costcode
    • Tax Jurisdictions can be overridden line item by line item
  • Non-Taxable
    • The entire PO, and all line items, will be marked non-taxable
    • Tax Jurisdictions cannot be overridden

Examples for Tax Per PO Line Distribution:

• PO is Tax per PO Line Distribution and is for a Job in Denver, CO
• Before PO Line Items are added to the PO, the Ship To Address is changed to the Warehouse in Boulder, CO
• The PO Lines with have Tax Jurisdictions for Boulder

• PO is Tax per PO Line Distribution and is for a Job in Denver, CO
• After PO Line Items are added to the PO, the Ship To Address is changed to the Warehouse in Boulder, CO
• The Previous PO Lines prior to the Ship To Address being changed will have Denver and any new PO Lines will have Tax Jurisdictions for Boulder

• PO is Tax Per PO Line Distribution and is for a Job in Denver, CO
• Before PO Line Items are added to the PO, the Ship To Address is changed to the Warehouse in Boulder, CO
• Costcode Tax Rule Maintenance has Jurisdictions for the State of Colorado only on the Materials Cost Type for the Job
  • so no Local City Taxes will be assigned on Material Purchases for that Job
• The PO Lines will have Tax Jurisdiction Colorado

Tax Per PO Line Jurisdiction Hierarchy is follows:

1. Was the PO Line Tax Jurisdiction overridden? If yes, use the override Jurisdiction
2. Does the Distribution have a Costcode Tax Rule Jurisdiction?  If yes, use that Jurisdiction
3. Does the PO have a Ship to Address other than the Job, WO, OU, or Equipment's OU, and the Ship To Address was assigned before the PO Lines were created?  If yes, use the Ship To Address Jurisdiction
4. Does the PO have a Ship to Address other than the Job, WO, OU, or Equipment's OU, and the Ship To Address was assigned after the PO Lines were created?  If yes, use the Ship To Address Jurisdiction going forward (existing lines will remain the Tax Jurisdiction from #3)
5. Does the PO have a Ship to Address that matches the Job? If yes, use the Job Address Jurisdiction, which defaults to the Ship To Address

NOTE: Once the ship to address has been overridden, the tax going forward will be based on the ship to address (unless a costcode tax rule override has been set). If the ship to address is overridden by mistake, each line item's tax jurisdictions must be updated manually back to the jobs jurisdictions