# Crazy Sales Tax

In my wonderful home state of Tennessee they have inacted (about a year ago) a single article sales tax law that has really thrown me for a loop. I am having next to an impossible time setting this up in the sales tax setup for Navision. I was hoping someone might have idea, suggestion, or something to help. The way the law works there are 3 catagories of sales tax (on taxable items). 1 is <\$1600. Regular tax - no problem. 2nd is for something that is from \$1601 - \$3200. That is charged the state rate for the entire amount and the local rate up to \$1600. (i.e. from \$1601 - \$3200 no local tax, only state). That I am 98% sure is working good. The 3rd catagory which the state added last year is for items ABOVE \$3200. The way it works is this: Full state and local tax for first \$1600. always works out to \$148.00 (7% state tax, 2.25% local) State tax ONLY from 1601 to 3200 (but the state rate changes to 9.75%) always works out to \$156.00 State tax only for all remaining amount (7%). Example selling one item for \$13072.00 Figure tax from \$1-\$1600 = \$148.00 Figure Tax from \$1601-\$3200 = \$156.00 Figure Tax on Remainder (\$13072 - \$3200 = \$9872) = \$691.04 TOTAL TAX = \$995.04 Maybe I am missing something simple in the sales tax setup but I can’t get this scenario to work well. I have come up with a way that gets it within \$0.16 everytime on ONE item. If you have more then one item of that Tax Group on the invoice it groups them together and figures tax on the subtotal (That will not work). The way I have the tax setup now is: Local County: Tax Below Max. 2.25% Max Amt: \$1600 Tax Above Max: 0% State Tax: Tax below Max 8.37% (figured percent that lands within \$.016) max amount: \$3200. Tax above Max: 7%. This seems really confusing and I hope I made a little bit of sense. If anyone can help I would greatly appreciate it. The NUMBER one problem is the grouping of similiar tax group items then figuring tax on the subtotal. Thanks

You poor bugger. [:)] Suggestion 1: Move to another state. [:D] If your setup example wouldn’t an item costing \$1000 be charged 8.73% State Tax? It looks like you’ve got a problem in that you need the tax details to allow something like: Tax Below Level 1: 7% Level 1 Max: 1600 Tax Below Level 2: 9.75% Level 2 Max: 3200 Tax Above Level 1: 7% It looks like a nasty modification to C398. -OR- What about another Jurisdiction within the Area: ` Jurisdiction Code TBM Max. Amt. TAM TSLOCAL 2.25 1600 0 TSSTATE1 7.00 1600 0 TSSTATE2 [}:)] 3200 0 TSSTATE3 0.00 3200 7 ` Hmmm so close. You might try making TSSTATE2 tax TSSTATE1 by setting up the calculation order in the Tax Area… Does Navision Support have any suggestions for you?

That does sound pretty close… I have strongly considered the other stat suggestion [:D] The first example you gave of an item that is \$1000 would have a different tax group code that would charge the proper amount (7% and 2.25%). You luckly get a repeat of each juridiction in each group. Which of course allows us to get as close as we have so far. I have submitted to Microsoft, they do not currently support Tennessee sales tax. Wonder why… [}:)] I think you were on the right track – that solves the 0.16 error I was coming up with if I do this: County: 2.25 1600 0 State1: 1.375 3200 0 State: 7 0 0 Since the state gets 7% on the whole sale this works for ONE item. Then the State1 will solve the additional 2.75% the state gets for the 1601-3200 (the math works out to \$44.00 - which is the same as 16002.75% or 32001.375%). Doesn’t solve the grouping problem tho… MS suggested that we setup a tax group for EACH item that is about 3200. For the client that I am currently working on that isn’t entirly a bad suggestion. They have less then 10 items above that price. Unfortunantly they have nearly an infinite number of special order items above that amount… (VERY RARE for them to sale).

Hi, I just stumbled on the same problem as you have. I checked the partnersource and there seems to be no change from Microsoft in order to handle this yet. Do any one have any updates on this issue? Did the suggestions above work out well ? Thank you Daniel

If I read your problem corretly you need the tax rate applied to each item. Not the total invoice amount, if that is the case you can set it up as follows Code Description 1 Regular tax 2 Local Tax 3 <1600 4 >1600 < 3201 Code Group Tax Type Tax BM Maximum Tax AM 1 TAX Sales Tax 1.5 3,200.00 0 2 TAX Sales Tax 2.25 1,600.00 0 3 TAX Sales Tax 0 1,600.00 2.75 4 TAX Sales Tax 5.5 3,200.00 4.25 So, if item cost 1600, tax code 1, 2, and 4 apply for a rate of 1.5 + 2.25 + 5.5 total rate 9.25 if item cost more then 1600 but less then 3200 tax code 1, 3, and 4 apply, rate is 1.25+2.75+5.5 = 9.75 if item cost more then 3200 tax code 3 and 4 apply - rate 2.75 + 4.25 = 7.0 tax rate. then you can have all items with the same tax group Now here in California,we have about 70 jurisdictions, and several partial exemptions if the customer is in the timber harvesting, agri-business ext. it is fun going through a sales tax audit

The best answer I have come up with (and Microsoft shares this idea) is that you have a seperate Tax Group Code for EACH item or EACH QTY that is above \$1600 or above \$3200. This has worked well for our client, because they rarly sale more than one or two items of that price on a single sales order. Example: Sales order with qty 2 of Item 1 @ \$1650. Line Item would look like: Type Item Qty Price Tax Group Item Item1 1 1650 SingleItem1600-1 Item Item1 1 1650 SingleItem1600-2 Sales order with Item 1 at \$1650 and Item 2 at \$1700 Item Item1 1 1650 SingleItem1600-1 Item Item2 1 1700 SingleITem1600-2 I hope this makes since. If you need more info feel free to email me. doug@bcquinncpa.com

Ok, thanks a lot for your update! I need to check with the client whether they can sell lines with only qty 1, if they can it looks like a doable solution. /Daniel