1. Configure Tax Rates
Set up tax rates for each state or region where you sell or rent products.
Tax rates can be defined by:
State
Zip code range
Multiple tax rates per state are supported to accommodate varying local tax structures.
2. Define Tax Classes
Tax classes categorize products and accounts for tax purposes.
Product Tax Classes: Assigned to individual products.
Account Tax Classes: Assigned to customer accounts.
These classes determine which tax rules apply during transactions.
3. Create Tax Rules
Tax rules link tax classes to tax rates.
A tax rule includes:
One or more Account Tax Classes
One or more Product Tax Classes
One or more Tax Rates
This setup defines how taxes are applied based on the combination of product and account classifications.
4. Assign Tax Classes
Products: Assign the appropriate product tax class in the product setup.
Accounts: Assign the relevant account tax class in the customer profile.
5. Configure Tax Calculation Settings
In Company Setup, configure how taxes are calculated based on jurisdictional requirements.
Calculation Basis Options:
Delivery Address: Where the product is shipped.
Billing Address: Who is being invoiced.
Origin Address: Where the product is shipped from.