Tax computations in Payables Management in Microsoft Dynamics GP

This article describes tax computations in Payables Management in Microsoft Dynamics GP.

Applies to:   Microsoft Dynamics GP
Original KB number:   863206

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 select 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 select 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 select Payables. Then, select 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 select Payables. Then, select Options.

• The Vendor Maintenance window

  To access the Vendor Maintenance window, point to Purchasing on the Cards menu, and then select 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 example is tax schedule A for the Payables Setup window:

• Detail A
• Detail B
• Detail C

The following example is tax schedule B for the Company Setup window:

• Detail A
• Detail D

The following example 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.