Tax Code

The Tax Code field on the PO Purchase Order Entry form, Info tab in the Items section.

Entry in this field requires that you first enter a Tax Type.

Enter the tax code to use for this purchase order item or press F4 to select from a list of valid tax codes. Tax code must be valid for the specified tax type. For example, if you enter a tax type of Sales or Use, you cannot enter a VAT tax code. If you enter a tax code that is not valid for the tax type, the system displays a warning and you must change the tax code before you can save the record.

This field defaults as follows:

  • Job Lines - The default is determined by the setting of the Base Tax On field in JC Jobs.

    • 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 Lines — Defaults tax code from IN Locations.

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

  • SM Work Order Lines — Defaults the tax code as follows:

    • If the Tax Type is 1-Sales or 3-VAT, this field defaults from the Tax Code field in SM Service Centers or SM Service Sites, depending on the Tax Source option selected for the related work order scope (0-Service Center or 1-Service Site, respectively).

    • If the Tax Type is 2-Use, this field defaults from the Use Tax Code field in SM Service Centers or SM Service Sites, depending on the Tax Source option selected for the related work order scope (0-Service Center or 1-Service Site, respectively)..

    Note: When generating work completed purchase lines from PO Purchase Order Entry, 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 is for a material or non-material item. For detailed information, see About Tax Calculations for Work Completed.
  • Intercompany Invoices — Defaults the tax code as follows:
    • 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.

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 item.

  • 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 item, the system relives the original tax rate amount from JC, but uses the current tax rate when creating an invoice.

Redirect Phase/Cost Type

If this PO item 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 validates 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 PO Item job (if a 1-Job line) or the work order job (if a 6-SM Work Order line). If the tax code specifies both a redirect phase and cost type, the phase/cost type combination must exist for the specified 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 PO item phase (job line) or the work order scope phase (SM WO line). (Note: If you have not assigned a phase to the work order scope, the cost type must exist for the PO item 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 or JC Phases for the PO Item job or the SM work order job. If the tax code specifies both a redirect phase and cost type, the phase/cost type combination must exist for the specified job in JC Job Phases or JC Phases. If the tax code specifies a redirect cost type only, the cost type must exist in JC Job Phases or JC Phases for the PO item phase (job line) or the work order scope phase (SM WO line). If you have not assigned a phase to the work order scope, the cost type must exist for the PO item phase.

    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.Why is this field disabled?

    This field is disabled if there has been activity posted on the PO item - for example if a receipt has already been posted to it.