Issue/Symptom/Question

Does PENTA calculate taxes on PO Freight Line Item Types?

Applies To

PENTA for Windows

Purchase Orders

AP Invoices

Freight

Resolution/Fix/Answer

No, if the PO Line Type is set to Freight, the Tax calculation does not include the Freight Amount.

Example, 6% tax rate:

The $100 of Freight is excluded.  The Tax is 233 x 6% or 13.98

If the Invoice does NOT have a PO and the transaction is being recorded as a Job Distribution, instead of a PO with a Freight amount.  The Freight Amount entered on the Document Tab for the Invoice will require a separate Job Distribution line that is made to be not taxable/tax exempt.  If the tax exempt Distribution line for Freight does not exist, PENTA accrues tax on the Freight Amount.

Note: Other strategies exist to alleviate the entry burden.  For example, creating a designated Cost Type and Costcode for Freight and using a Costcode Tax Rule Template.  Please log a Service Desk Ticket if interested in having a discussion about strategies.