A question about US Sales Tax

matias_jaure

Hi all!.. we use a Navision 4 W1 version, but we have to implement a system to a US client. Have anybody try to use Sales Tax with Navision 4.0 W1 version???, we try an it calculates right but we don't want to have inconvenient with this issue later. Thanks!

Matias

themave

We have used US sales tax since Navision version 2.0, now on 4.0

there is one known issue that has never been addressed, on a sales return order or credit memo, the tax can be calculated to 3 digits and rounded to two digits on the sales return order or credit memo, when you attempt to post it, you receive an error message about inconsistant g/l entries and you are unable to post.

for example a credit memo for $100 with sales tax of 8.755% will calculate the tax at 8.755, so the credit total will round to 108.76, but the g/l tax entry will be calculated at 8.755, thus the 1/2 penny error.

to post the credit memo, you have to hit F9 statistics, and on the invoice tab, for the detail line with the sales tax of 8.755 you have to change it to 8.76, you are then able to post the credit memo.

This doesn't come up often as everything has to come up just right, like sales tax rate and credit amount must calculated exactly to the 1/2 penny amount, it it were caculated above or below the 1/2 penny it would round it correctly.

this official fix we got from Microsoft was the above mentioned fix, ie manually editing the entry before posting.

other then that sales tax has worked very well for us.

matias_jaure

themave wrote:

We have used US sales tax since Navision version 2.0, now on 4.0

there is one known issue that has never been addressed, on a sales return order or credit memo, the tax can be calculated to 3 digits and rounded to two digits on the sales return order or credit memo, when you attempt to post it, you receive an error message about inconsistant g/l entries and you are unable to post.

for example a credit memo for $100 with sales tax of 8.755% will calculate the tax at 8.755, so the credit total will round to 108.76, but the g/l tax entry will be calculated at 8.755, thus the 1/2 penny error.

to post the credit memo, you have to hit F9 statistics, and on the invoice tab, for the detail line with the sales tax of 8.755 you have to change it to 8.76, you are then able to post the credit memo.

This doesn't come up often as everything has to come up just right, like sales tax rate and credit amount must calculated exactly to the 1/2 penny amount, it it were caculated above or below the 1/2 penny it would round it correctly.

this official fix we got from Microsoft was the above mentioned fix, ie manually editing the entry before posting.

other then that sales tax has worked very well for us.

I have sent you a pm to make a consult, but I have a doubt: are you using NAV4.0 W1 version?

ara3n

could you tell us in what kind of business line you are?
who are you customers? (End users? Vendors?)

matias_jaure

ara3n wrote:

could you tell us in what kind of business line you are?
who are you customers? (End users? Vendors?)

I don't get you... why do you need that information?

themave

matias_jaure wrote:

.....I have sent you a pm to make a consult, but I have a doubt: are you using NAV4.0 W1 version?

you are correct, we use US version, but the rounding error is something you should check out.

Alex_Chow

matias_jaure wrote:

Hi all!.. we use a Navision 4 W1 version, but we have to implement a system to a US client. Have anybody try to use Sales Tax with Navision 4.0 W1 version???, we try an it calculates right but we don't want to have inconvenient with this issue later. Thanks!

Matias

Sales tax rates are always updating and changing. It's not a "setup and forget" type of deal.

David_Singleton

themave wrote:

... there is one known issue that has never been addressed, on a sales return order or credit memo, the tax can be calculated to 3 digits and rounded to two digits on the sales return order or credit memo, when you attempt to post it, you receive an error message about inconsistant g/l entries and you are unable to post....

Hey David, are you sure? This error was most noticeable in 3.01 and 3.10. In 3.10 they release a number of Hot fixes to address this. The last fix was pretty good, though there were a couple of situations it didn't handle they were rare. The issue returned with 3.60, fixed int he first Service pack, and came back again in 3.70, but by 3.70B it was fixed. I have never seen the error since in any version since 3.70B (not saying it isn't there, just saying I never saw it.)

Have you done a full object upgrade, or are you still runnign older objects on current Executables? If its still there in a supported version, then MS should fix this. The error came about because of how the Amount Inc. Tax field is 0 till you release, and if this function was not correctly upgraded the error could still be there.

By the way, one way to fix the error, was to put a blank line (Type = Item, No. = '') at the end of the invoice. this line always rounds down to zero, and normally fixes the issue. Not a nice fix, but it often works.

Also if you have objects with the error, one good tell tale sign, is that if you Hit F9 on a bad order, and ten click on the sales tax field then the value changes to the correct number.

ara3n

matias_jaure wrote:

ara3n wrote:

could you tell us in what kind of business line you are?
who are you customers? (End users? Vendors?)

I don't get you... why do you need that information?

If you are selling to other Vendors, then you don't need to worry about sales tax.
Sales tax is collected if the customer is an end users. So if you are a distributor you don't have to worry.

We have customers in US that use W1 and don't worry about sales tax.

themave

Sales tax reports to state agencies are different for each state also.

we operate in California and Nevada, both are completely different.

no built in reports to handle it. you will need to create your own

for Nevada we can use the standard sales tax collected report for the most part, but for California, I have to use several different reports, and a microsoft access report.

I would second the statement it is not set and forget, but once you understand it, it works very well.

Here in California, for instance we have around 50 different tax areas, which are made up of a state rate, a local rate and a special county rate (jurisdictions in Navision sales tax lingo) Well the state decided it wanted to give a break to farmers, so it cut the state rate from 7.25% to 2.25% for special ag exempt customers. so I had to set up 50 new tax areas for the reduced rate.

so, there is a tax area for my city with the state tax jurisdiction (7.25%)rate plus the county jurisdiction rate and the special city jurisdiction tax, and there is second tax area for my city made up of the lower state jurisdiction rate, the same county and city jurisdiction rates.

so the sales tax granual handles it fine, but it is work to keep it up.

matias_jaure

We have all the dificulties that the mave said in the last message

themave

David Singleton wrote:

themave wrote:

... there is one known issue that has never been addressed, on a sales return order or credit memo, the tax can be calculated to 3 digits and rounded to two digits on the sales return order or credit memo, when you attempt to post it, you receive an error message about inconsistant g/l entries and you are unable to post....

Hey David, are you sure? This error was most noticeable in 3.01 and 3.10. In 3.10 they release a number of Hot fixes to address this. The last fix was pretty good, though there were a couple of situations it didn't handle they were rare. The issue returned with 3.60, fixed int he first Service pack, and came back again in 3.70, but by 3.70B it was fixed. I have never seen the error since in any version since 3.70B (not saying it isn't there, just saying I never saw it.)
....

Yep, I am sure, we did a full upgrade from 2.0 with advanced distribution to 4.0, (actually your business did the upgrade for my solution center, nice job by the way). But it is diffenately still a problem, just doesn't come up much because everything has to calculate just right, but I get a call a least once a month from a branch office, saying they are getting wierd message trying to post a sales return order. I remind them of the fix, with the F9 and they slap there forehead and say oh yea. or else I shadow there system in terminal server and do it my self.

Savatage

here's an example of how annoying these rates can get & this is just 1 state ](*,)

http://www.photobooksonline.com/books/salestax.html

matias_jaure

And have anybody in US try to use the W1 (world version) in US???. Managing US Taxes of course

themave

Savatage wrote:

here's an example of how annoying these rates can get & this is just 1 state ](*,)

http://www.photobooksonline.com/books/salestax.html

That is pretty similar to California, execpt they then doubled it to make say Albany have either an 8% rate or a 3% rate depending on what type of business you were selling to.

Ah, the joys of Sales tax collection

David_Singleton

matias_jaure wrote:

Hi all!.. we use a Navision 4 W1 version, but we have to implement a system to a US client. Have anybody try to use Sales Tax with Navision 4.0 W1 version???, we try an it calculates right but we don't want to have inconvenient with this issue later. Thanks!

Matias

In terms of the question of Sales Tax in W1, then as David says, you should be OK, there are a few things you need to check, such as if for some reason you tried to mix VAT and Sales Tax in a US company (yes I have seen it happen).

But what everyone else is trying to warn you of, is that Sales Tax is vry complex int he US, its nothing like VAT. Where in (say) the UK, you might have 3 or 4 VAT rates, that change every few years, in the US, you can have tens of thousands of tax rates, and they can change every month, sometimes even mid month. Tax is based on exactly where you ship to. For example if you ship service items to a contractors home so they can use them on a job, then you charge a different rate than if the parts are shipped direct to the site. And a lot of this is not handled in Navision without some careful thought, setup and training.

So basically Yes you can handle US sales tax in W1, BUT be careful, and make sure to have a tax auditor make sure that all is tested and working.

A simpler solution may be to tell the client to move all operations to Las Vegas, and work exclusively form there and don't have any offices anywhere but Nevada.

Alex_Chow

matias_jaure wrote:

And have anybody in US try to use the W1 (world version) in US???. Managing US Taxes of course

The best bet is to contract a NSC or a contractor in the US that's familiar with the sales tax if you're not comfortable with it.

David_Singleton

themave wrote:

... Yep, I am sure, we did a full upgrade from 2.0 with advanced distribution to 4.0, (actually your business did the upgrade for my solution center, nice job by the way)...

Graet to hear you are happy, but I can't take the credit, I don't think we did it. I personally check every upgrade we do, so I would have known it was your company. It may have been the other David S.

matias_jaure

We have a consultant that provide us the tax rates divided by Tax Area and Jusrisdiction every month, we have no problems about that. Our doubt is if it will works fine beacouse of the W1 world version, as David said before, it have to work, but nobody is sure if it works all right... so, may be some one afford this kind of problem before

David_Singleton

themave wrote:

Savatage wrote:

here's an example of how annoying these rates can get & this is just 1 state ](*,)

http://www.photobooksonline.com/books/salestax.html

That is pretty similar to California, except they then doubled it to make say Albany have either an 8% rate or a 3% rate depending on what type of business you were selling to.

Ah, the joys of Sales tax collection

Now we just need someone from Texas, and we can really start talking about taxes.

Basically New York, California and Texas are the states with the most complex sales tax in the US (IMHO), BUT the most complex city is probably Atlanta, and thats good for us, because the Navision sales Tax engine was written in Atlanta where they had a worse case scenario to work with.

Nevada and Delaware are generally the simplest (again IMHO).

ara3n

So is maryland, just one rate 5.0 % for the whole state.

There are two tax update companies where you can get a file that you can load into navision. Veritex and CCH.

themave

David Singleton wrote:

themave wrote:

... Yep, I am sure, we did a full upgrade from 2.0 with advanced distribution to 4.0, (actually your business did the upgrade for my solution center, nice job by the way)...

Graet to hear you are happy, but I can't take the credit, I don't think we did it. I personally check every upgrade we do, so I would have known it was your company. It may have been the other David S.

Your are correct, it was the other David S. sorry I mixed you up with him