Tax computations in Payables Management in Microsoft Dynamics GP

INTRODUCTION
This article describes how taxes are computed in Payables Management based on the tax schedule IDs and on the shipping method in Microsoft Dynamics GP and in Microsoft Business Solutions - Great Plains.
More information
The purchase tax schedule is located in the following locations:
  • The Company Setup window

    To access the Company Setup window in Microsoft Dynamics GP 10.0 and later versions, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Company, and then click Company.

    To access the Company Setup window in Microsoft Business Solutions-Great Plains 8.0 and in Microsoft Dynamics GP 9.0, point to Setup on the Tools menu, point to Company, and then click Company.
  • The Payables Setup Options window

    To access the Payables Setup Options window in Microsoft Dynamics GP 10.0 and later versions, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Purchasing, and then click Payables. Then, click Options.

    To access the Payables Setup Options window in Microsoft Business Solutions-Great Plains 8.0 and in Microsoft Dynamics GP 9.0, point to Setup on the Tools menu, point to Purchasing, and then click Payables. Then, click Options.
  • The Vendor Maintenance window

    To access the Vendor Maintenance window, point to Purchasing on the Cards menu, and then click Vendor.
The shipping method first determines the tax schedule ID that will be used to calculate the tax. If the shipping method that is assigned to the transaction is a Delivery type, the purchase tax schedule in the Company Setup window will be compared to the tax schedule that is assigned to the purchase tax schedule ID in the Payables Setup Options window.

If the shipping method that is assigned to the transaction is a Pickup type, the purchase tax schedule that is assigned to the vendor's tax schedule address ID will be compared to the tax schedule that is assigned to the purchase tax schedule ID in the Payables Setup Options window. The vendor's tax schedule address ID is located in the Vendor Maintenance window.

Consider the following example. The following is tax schedule A for the Payables Setup window:
  • Detail A
  • Detail B
  • Detail C
The following is tax schedule B for the Company Setup window:
  • Detail A
  • Detail D
The following is tax schedule C for the Vendor Maintenance window:
  • Detail B
  • Detail C
For the Delivery shipping method, Microsoft Dynamics GP looks in the Company Setup window and in the Payables Setup window. Based on the example, only Detail A will be computed for tax because Detail A is the only common tax detail in both tax schedules.

For the Pickup shipping method, Microsoft Dynamics GP will look in the Vendor Maintenance window and in the Payables Setup window. Based on the example, Detail B and Detail C will be computed for tax because Detail B and Detail C are the common tax details in both tax schedules.

Notes
  • The example will only work if you have the Use Shipping Method when Selecting Default Tax Schedule check box selected in the Company Setup Options window.
  • If the Use Shipping Method when Selecting Default Tax Schedule check box is not selected, Microsoft Dynamics GP will compare only the tax schedules in the Vendor Maintenance window and in the Payables Setup window. It does this to find the similar tax details that will be used to compute taxes.
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Article ID: 863206 - Last Review: 12/14/2015 18:29:00 - Revision: 7.0

Microsoft Dynamics GP 2013, Microsoft Dynamics GP 2010, Microsoft Dynamics GP 10.0, Microsoft Dynamics GP 9.0

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