Basic question about setting up Tax Codes

[laurie_mcginley]

Hi all,

we are needing to setup sale tax calculations based on jurisdictional codes (state/county/city). I see where I need to create those jurisdition codes in configuration for each of the different locations (a couple of hundred I think).

What I don't fully understand yet is what is needed when setting up the TAX CODEs where the actual tax rates are stored and the associated accounting info...

The tax code is a 2 digit code. So using all 200+ locations as an entry doesn't seem workable unless I use an alpha code. But then I'm not sure that there needs to be a tax code record for each jurisidiction combination anyway. Perhaps there should be one tax code for each possible combination of rates, as some jurisdictions have the same rate schedule.

So my question here is just exactly how does that tax code work and how should it be configured in this case?

Thanks for any information you have to share as this is all new territory for me.

Laurie

[Former Member · Accepted solution]

Hi

Laurie

Please use the link

Thx.

[Former Member]

Hi Laurie

I had come across similar scenario. I suggest you to create a table in excel where you have combine similar type of taxes so that you can minimize total no. of tax condition.

In a table you take material horizantally and tax rates vertically and group them for each state, as you cannot combine multiple state for tax calc.

After that go to FTXP and create tax conditions.

Let me know if you have any more queries.

Best regards

seshu

[laurie_mcginley]

Well.... making progress.... now another question has cropped up!

We have tax codes that will use 2 of the 3 jurisdiction levels. Level 1 for state sales tax and Level 3 for local sales tax.

It looks good when I create a sales document (VA01) but the Local tax rate is being calculated on the subtotal of the base amount + the state sales tax.

So for example:

CnTy Name Amount Crcy Condition Value

PR00 -- Price -- 100.00 -- USD -- 100.00

UTXJ -- Tax J -- 0.000 -- %

JR1 -- Tax L1 -- 6.500 -- % -- 6.50

JR3 -- Tax L3 -- 2.300 -- % -- 2.45

Total: 108.95

The actuall amount for JR3 should be $2.30. The $2.45 is the 2.3% applied to $106.50

What might I have missed in defining the codes or procedures that would be causing the codes to calc cummulatively???

Thanks for your ideas.

Laurie

[Former Member]

Hi

Check the pricing procedure. You must have define to calculate tax on PR00+JR1. If you want to calculate tax only on PR00 hten make chages in pricing procedure. Use Tcode VOK0 and check.

Thx.

[laurie_mcginley]

Thanks Dwarkesh, I thought that might be where it is happening. When I checked I see no SubTo entries for any of the PR1..PR4 (sales tax) conditions. In fact there are no parameters on any of them other then they are manditory. Is there somewhere else I need to look?

Thanks

[laurie_mcginley]

Still digging...

What I find is that if I use the pricing procedure provided by SAP - RVAJUS - It is doing what we want, that is both state rate and local rate are being used. However it too is using as the CONDITION BASE when it gets to the local rate, a total of the CONDITION BASE which is the gross sale PLUS the state rate.

Price = 100.00

Item-Conditions-Detail ( state rate condition JR1):

Amount 6.5%

Condtion Base = $ 100

Condition Value = $ 6.50

100 + 6.5 = 106.50

Item-Conditions-Detail ( local rate condition JR3):

Amount 2.3%

Condtion Base = $ 106.50 <----- the problem

Condition Value = $ 2.45 <----- therefore wrong result

Control Data for both JR1 and JR3 condtions:

Condition Class: D - Taxes

Calculat.Type: A - Percentage

Condit. Catagory: 3 - Tax JurDic level 3

Cond. Control: A - Adjust for quantity variance

Cond. Origin: A - Automatic Pricing

Any further suggestions? It seems it is in the pricing procedure or the condition JR1, JR3 somewhere.

I just don't know where.

Thanks again for your help.

Laurie

[laurie_mcginley]

Well, I'll reply to my message because we found the solution, should anyone else run in to this...

In the taxing procedure RVAJUS we added to the JR1-4 conditions in the AltCBV (alternaive condition base value) the code for Net Value - so that when it is use it uses the Net Value rather then the subtotal to that point in the calculation.

Laurie

[laurie_mcginley]

Thanks for the info so far, it is helping me understand. I still am unclear on the relationship between Tax Codes and Jurisdictions.

Is there a 1:n relationship here. One Tax Code can have many Jurisditions associated with it.

In Transaction FTXP I can select a tax code and a jurisdiction. Then I can enter (or change) the tax rate percentage in the next screen (Maintain Tax code: Tax Rates)

What table is this relationship stored?

Thanks again for your time in helping me out here!

Laurie

[Former Member]

Hi

Tax juriddction code is assign to tax calculation procedure and is assing to country.

You check table T683S.put yr tax calculation procedure KALSM field and check.

Thx.

[Lakshmipathi]

Dear Laurie

Several parameters influence the tax amounts and tax rates determination. The most important ones include:

- Delivering country (origin)

- Tax class of the ship-to partner

- Tax class of the material being shipped

- Tax calculation date

- Jurisdiction code from ship-to-party (customer)

- Jurisdiction code from ship-from address (plant)

- Point-of-order acceptance

- Point-of-order origin

SAP defaults the ship-from jurisdiction maintained on the plant as the point-of-order acceptance, and defaults the ship-to jurisdiction maintained on the customer as the point-of-order origin.

thanks

G. Lakshmipathi