Tax Code

Enter a tax code or press F4 to select one from a list. Tax codes are created and maintained using the HQ Tax Codes form.

For existing item lines, this field defaults from the purchase order item and cannot be changed. If entering a new item line, this field will default based on the PO item line type:

  • Job — The default is determined by the setting of the Base Tax On field in JC Jobs. If set to:

    • J-Job , the tax code defaults from JC Jobs ( Tax Code field). If no tax code is specified for the job, the default will be null.

    • V-Vendor , the tax code defaults from AP Vendors ( Tax Code field). If a tax code is not specified for the vendor, the default will be null.

    • O-Vendor Override , the tax code defaults from AP Vendors. If a tax code is not specified for the vendor, the tax code will default from JC Jobs. You can override the default as necessary.

  • Inventory — Defaults tax code from IN Locations.

  • Expense, Equipment, EM Work Order, or SM Work Order – Defaults tax code from AP Vendors. If a tax code is not specified for the vendor, default will be null.

  • Expense, Equipment, or EM Work Order – Defaults tax code from AP Vendors. If a tax code is not specified for the vendor, default will be null.

  • SM Work Order - Defaults as null.

Note: When generating work completed purchase lines from PO Item Distribution, the system posts the tax information to the work completed line based on the work order type, the billable status, and whether the PO item line is for a material or non-material item. For detailed information, see About Tax Calculations for Work Completed.If you enter a non-taxable material or a non-valid material (not applicable for Inventory lines), the tax code will default as null.

Committed Costs (Job Lines)

If you post a job cost line (JC type) with tax, the system relieves committed costs from the phase/cost type in JC Cost Detail table for the tax amount as follows:

  • if phase or cost type overrides do not exist for the tax code, the system uses the phase and cost type specified for the PO line.

  • if phase and cost type overrides exist for the tax code, the system uses the tax code phase and cost type.

  • if a phase override exists for the tax code, but a cost type override does not exist, the system uses the tax code phase and the cost type from the PO line.

  • if a cost type override exists for the tax code, but a phase override does not exist, the system uses the phase from the PO line and the tax code cost type.

Note: In all cases, the system updates JC with the tax rate amount. When you create an AP transaction for this PO line, the system relives the original tax rate amount from JC, but uses the current tax rate when creating an invoice.

Intercompany Transactions

If the tax type is Sales or VAT (Value Added Tax), the tax code defaults based on the Tax Group assigned to the AP Company.

If the tax type is Use, the tax code defaults based on the Tax Group assigned to the 'posted to' company.

Redirect Phase/Cost Type

If the PO item distribution line is for a job (line type 1-Job) or a job-related SM work order (line type 6-SM Work Order) and the tax code is assigned a redirect phase and/or cost type (i.e., JC Tax Phase and/or JC Cost Type in HQ Tax Codes), the system will validate the phase and/or cost type based on the Phases on this job are locked checkbox in JC Jobs. Validation will be as follows:

  • Phases Locked - If the Phases on this job are locked box is checked and the tax code specifies a redirect phase only, the phase must exist in JC Job Phases for the line's job. If the tax code specifies both a redirect phase and cost type, the phase/cost type combination must exist for the line's job in JC Job Phases. If the tax code specifies a redirect cost type only, the cost type must exist in JC Job Phases for the line's phase.

  • Phases Not Locked - If the Phases on this job are locked box is not checked and the tax code specifies a redirect phase only, the phase must exist in JC Job Phases (for the line's job) or in JC Phases. If the tax code specifies both a redirect phase and cost type, the phase/cost type combination must exist in JC Job Phases (for the line's job) or in JC Phases. If the tax code specifies a redirect cost type only, the cost type must exist for the line's phase in JC Job Phases or JC Phases.

Note: If validation determines that the conditions indicated above do not exist, you will need to either use a different tax code or add the phase and/or cost type combination to JC Job Phases or JC Phases (depending on the "locked phases" flag) before you can post the batch.