Managing Customer Order Sales Taxes—Exercises

IMPORTANT
It is extremely important that you set up and work within your own site to maintain your data integrity. If you work within any other site, you will compromise your own exercise data as well as the data of other students. Predictable exercise results require that your data be isolated in your own site.

Basic Data Setup

Enter Site

Purpose: The purpose of this exercise is to customize your site to be used in the following exercises. The site must be connected to a company that uses the sales tax type, as specified below.

Windows:
Site
Sites per User

  1. Verify that your site is connected to company 10 (IFS Racing) and has a delivery address connected.
  2. Connect your site to your user as the default site.

General exercise for Enter Sites

Required Data

Setting up Sales Tax Conditions

Purpose: The purpose of this exercise is to show how to set up sales tax conditions for a domestic customer and an international customer.

Windows:
Company/Invoice/General
Company/Invoice/Tax Information
Tax Codes
Customer
Sales Part
Inventory Locations
Inventory Part
Receive Inventory Part
Package Part

  1. Open Company window and click the Invoice tab.
  2. Query for company 10. On the Tax Information tab, verify that the Tax Regime is Sales Tax, make sure the Tax Liability field is set to TAX (or any tax liability of type Taxable) and the Create Posting at Invoice Entry check box on the General tab is cleared, and that the value in the Amount Method list on the Tax Information tab is Net Amount Entry.
  3. Verify that the Sales Tax Calculation Method list is set to IFS Applications.
  4. Company 10 is an American company. XX-202, C.S.C. New York, has offices in New York and Chicago, and is, therefore, considered a domestic customer. XX-101, C.S.C Paris, is located in France and, therefore, considered an international customer.
  5. Open the Tax Codes window and create four tax codes: one for New York (state), one for New York City, one for Illinois, and one for Chicago. Enter an ID, a description, and a percentage in the respective fields, and enter or select Sales Tax in the Tax Type list.
  6. Create XX-202, C.S.C. New York in the Customer window. Enter two delivery addresses: one for New York and one for Chicago. The Chicago address will not pay tax.
  7. For the New York address, enter your company and make sure the Tax Regime is Sales Tax on the Tax Information tab.
  8. Click the Taxes tab and enter the two tax codes for New York. Use the List of Values to select from the values you entered in step 5.
  9. In the Tax Information tab, enter your company for the Chicago address. For the purposes of these exercises, this address will be tax-exempt, so make sure the Tax Liability field is set to EXEMPT (or any tax liability of type Exempt).
  10. Click the Tax Exempt Info tab and enter values of your choice in these informational fields.
  11. Return to the New York address, and verify that the delivery address is selected as the default address in the Address Type table found on the General Address Info tab of the Address window.
  12. Open the Inventory Locations window and create two picking locations for your site.
  13. Create XX-101 C.S.C Paris in the Customer window. Enter company on the Tax Information tab. No other tax conditions should be set up.
  14. Open the Sales Part window and create XX-18-700, Race Car De Luxe. Select the Taxable check box on the General tab. Manually receive some of the parts into stock in the Receive Inventory Part window.
  15. Create XX-58-400, Wheel Kit, a package part that consists of two pieces of XX-58-425, Race Wheel (stored sales part), and 12 pieces of XX-98-444, Wheel Bolts (stored sales part). Create the parts in the Sales Part and Package Part windows. Select the Taxable check box on the General tab.
  16. Manually receive some of the XX-58-425 and XX-98-444 parts into stock in the Receive Inventory Part window.

General exercise for Customer 
General exercise for Enter Sales Part 
General exercise for Enter Package Part 
General exercise for Enter Inventory Part 
General exercise for Enter Locations 
General exercise for Receive Inventory Part

Main Exercises

Using Sales Tax for a U.S. Customer

Purpose: The purpose of this exercise is to show how to sell parts to a taxable domestic customer and receive sales taxes on the invoice. You will learn how to change the order line address and modify the order tax lines.

Windows:
Customer Order
Customer Invoice
Archived Reports

  1. XX-202, C.S.C New York, wants to order 50 pieces of XX-18-700, Race Car Deluxe, and 30 pieces of XX-58-400, Wheel Kit, and receive these parts in New York.
  2. The company also would like to order 40 pieces of XX-18-700, Race Car Deluxe, and 35 pieces of XX-58-400, Wheel Kit, and receive these parts in Chicago.
  3. Create a customer order header with order type QO and add the order lines in the Customer Order window.
  4. For the two order lines that should be sent to Chicago, you need to change the address. Do this by right-clicking and then clicking Order Line Details/Order Line Address.
  5. In the Customer Order Line Address dialog box that opens, clear the Order Default check box, select the Single Occurrence check box and enter new address information. Click OK.
  6. Look at the Pay Tax and Taxable fields on the four order lines. What is shown there? Why do they differ?
  7. Look at the tax for one of the order lines going to New York by selecting it, right-clicking, and then clicking Order Line Taxes. Remove the tax for New York (state).
  8. Take a look at the customer order lines and note the including tax amounts.
  9. Release the customer order and note the customer order number.
  10. Open the Customer Invoice window and search for the customer order. Look at the Gross Amount, Net Amount, and Tax Amount fields in the upper part of the window.
  11. Click the Lines tab and look at the Gross Curr Amount, Net Curr Amount, and Tax Curr Amount fields.
  12. To change a tax percentage you have to remove a tax code and then add a new one. You can, however, manually change the tax amount on the customer order line, if requested.
  13. In the Customer Invoice window, right-click and click Print Invoice.
  14. Search for the printed invoice by populating in the Archived Reports window. Look at the tax shown on the printed invoice. How does it differ from the tax shown in the Customer Invoice window?

Using Sales Tax for a Non-U.S. Customer

Purpose: The purpose of this exercise is to show how to sell parts to an international customer and not receive sales tax on the invoice.

Windows:
Customer Order
Customer Invoice
Archived Reports

  1. XX-101, C.S.C Paris, wants to buy 25 pieces of XX-18-700, Race Car Deluxe, and 10 pieces of XX-58-400, Wheel Kit.
  2. Create a customer order header with order type QO and add the order lines in the Customer Order window.
  3. Look at the Pay Tax and Taxable fields on the three order lines. Are any of the check boxes selected? Why?
  4. Take a look at the customer order lines and note the including tax amounts. Is there any difference? 
  5. Release the customer order and note the customer order number.
  6. Open the Customer Invoice window and search for the customer order. Look at the Gross Amount, Net Amount, and Tax Amount fields in the upper part of the window. Is anything shown in the Tax Amount field? Why not?
  7. Click the Lines tab and look at the Gross Curr Amount, Net Curr Amount, and Tax Curr Amount fields. Is anything shown there?
  8. In the Customer Invoice window, right-click and click Print Invoice.
  9. Search for the printed invoice by populating the Archived Reports window.

Note: Customer orders for tax-exempt domestic customers will be similar to those for international customers.