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Advanced Tax Calculation

What is considered Advanced Tax Calculation?

Advanced Tax Calculation (ATC) is when you use the Taxable Tax Option for your transactions' line items.

Advanced Tax Calculation is a Microsoft Dynamics GP feature that allows for advanced control over the way the Microsoft Dynamics GP calculates sales and purchases tax.

Advanced Tax Calculation uses two Tax Schedule to calculate the tax. Of the two tax schedules, one of them is assigned to the document and the other is assigned to the inventory item, freight or miscellaneous charge. The tax is calculated based on the Tax Detail that exist in both tax schedules. If a tax detail exists in only one of the tax schedules, then that tax detail will not be included in the calculations.

To use ATC

You must set an inventory item's Tax Option to Taxable, and then specify which tax schedule ID to use for that particular item. The tax schedule ID you choose should be based on the tax detail IDs in that schedule.

For example, an item is tax exempt in California, and is taxable everywhere else. You would need to give this item a tax schedule ID that had taxable tax detail IDs for everywhere except California, in which only Exempt Tax Detail would be used. This schedule would contain a tax detail for every state, county and city, all of which would be taxable except the California state, county and city tax details.

Creating and maintaining such tax schedules can be time consuming. Using the DZ Modify Tax Schedules window may significantly ease this process.

What is considered standard tax calculation?

Using the Base on Customer item sales tax option.

The Base On Customer option effectively uses the customer's tax schedule for both (i.e. the document and the inventory item). This results in both schedules having an identical set of details, and therefore the effective tax rate is the total of all of the details.

Base on Customer is more simple to maintain than using ATC, and it is the default way to handle multiple taxing jurisdictions in the typical DynamicZip installation.

To assist with controlling the taxation of items, freight & miscellaneous charges per state, please review DynamicZip's Tax By Item Category feature.


dynamiczip/glossary/advanced_tax_calculation.txt · Last modified: 2015/04/20 23:34 (external edit)