Using Sales Tax in Nav 4 SP2

Hi Forum,

does anyone have any info on using/implementing Sales Tax in Navision. One of my clients has a US division and I am about to implement this division in Nav 4 and Sales Tax would be be of benefit to them but I now nothing about it. Any documents or links would be very useful to me. Thanks

Hi Paul,

As far as I’m aware Sales Tax in the uses the same concept as our VAT. Tax groups are assigned to customers/suppliers and items. The tricky part is to get the relevant tax %'s which vary greatly depending on what the item is. Also if the division trades out side of their state then addition tax schedules and %'s will have be defined. The best suggestion would be get the company to contact their American auditors and ask for their help. As the auditors will know (or can find out) exactly what rates apply and what needs to be setup.

For specific help on US taxes and rates, just do a search on Google.

Hope this will help.



At first glance Sales Tax looks a lot similar to VAT, but believe me it is a totaly differnt world.

The core difference is responsibility.

With VAT, the buyer pays VAT, and then at the end of the month fills in a report that allows them to claim back VAT. If soemthing goes wrong, then the buyer, the customer is the person that gets into problems.

With sales tax, the Seller is responsible for paying the tax, and even if for example the customer gave them wring information, its stil the vendor that pays the fines and has the problems.

So this very simple difference leads to all the issues in differences.

In the UK you have maybe 4 tax rates, and one reporting body. In the US you have tens of thousands of rates, and thousands of reporting authorities. Some complex places like LA, Atlanta and Dallas have up to four taxes on an item, and you even have some towns that can charge different tax depending on the street number of the building you deliver to. (OK that’s extreme and rare, but it happens).

Anyway. If you are going to implement Sales Tax, you really want to do it with someone that knows what they are doing. It really is vastly more complex than VAT, and your customer will pay for any mistakes made. PS one hint, to get started, use Zip codes as the Tax Area code, since that is the way most tax service providers are going.

Oh and if all this sounds complex, you just gotta see how they do it in Canada.

Hi John and David, thanks for your replies on this one. This particular client is currently on 2.5 GB but the system was heavily modified to cope with US tax and works pretty well apart from when a tax rate changes after the Order has been raised (nothing a minor routine cant cope with). I was hoping to put them onto version 4 without having to redo the development hence, Sales Tax. I do have some understanding of the complexity of the US tax system and how it can change for numerous reasons from many telephone conversations with the FD in Virginia but didnt realise that Sales Tax was that complicated as David has pointed out. Maybe it would be simpler to get our developer to make the changes he did in 2.5 and forget about Sales Tax altogether. However Davids hint at using the Zip Code could solve the problem if I only knew how Sales Tax worked in Navision in the first place. Any documentation would be appreciated. As for Canada, I’ll steer well clear of them in which case. Thanks again for your input. Paul

I would give serious contemplation to moving back to standard. I gather that the Sales Tax engine is in W1, and thus should be accessible in 4.00 GB now. That way you wont have to keep fixing and changing stuff.

Thanks David, I’ll see if I can track it down and play with it in Cronus.

BTW in the standard TAX engine, rates are date based, so it handles the situation with open orders and changed rates.

Excellent, thanks David [:D]

Hi Paul,

did you manage to get some documents and stuff about Sales Tax in Navision. I would be grateful if you could share them with me.



Hi Seb, unfortunately not. Ive left this thread open in the vain hope that someone might have some documents. I will leave it a couple more days then close it and hope that I can work it out for myself. Paul [:(]