(Canadian users, or users who have purchased Line-Item Tax capability [the "Enhanced MTX Support" flag is set to Y])
Use the following procedure to assign a tax code at the item level. This tax code can be a regular tax code or a composite code (Canada). Whenever an item has an item-level tax code, this is the only tax it is subject to. This means that the item is not subject to any of the tax assessed at the transaction level.
Epicor Software Corporation™ strongly recommends that you set up tax codes specifically for item-level tax. Then, make sure item-level tax codes are never used as transaction-level tax codes and vice-versa. This must be enforced procedurally, as there is nothing on the system that forces you to follow this convention.
Line-item tax figures will be split out and printed on receipts and invoices. The receipt/invoice will break out the tax amount(s), along with the amount of the sale that each tax was subject to. For each tax code that gets reported, the first ten characters of the tax code's "Location" print, which is why it is important that the "Location" accurately describe the type and rate of the tax.
Canadian users only: If you assign a line-item tax code to an item, that item is not subject to any "inclusive" tax that would normally come from an "inclusive" component of the transaction's tax code. If you need an item-level tax rate (GST) that is different than the transaction's item tax rate, but it is also subject to PST (and the PST is inclusive of this tax amount), you need to create another composite tax code made up of two components: 1) a GST tax code with the appropriate tax rate, and 2) the PST tax code used in your other composite Canadian tax code(s). Also, you might have an item that is just GST taxable, and PST non-taxable; for this purpose, set up a new "regular" tax code (not a composite) with the appropriate tax rate.
Set up the appropriate line-item tax code(s) in the Tax Code Maintenance window.
Display the Inventory Maintenance window and click the Codes tab.
Display the SKU Part to which you want to assign a tax code.
Click the arrow to the right of the Tax Code field, and select the appropriate tax code from the drop-down list.
Click Change.
POS allows up to 15 line item or component taxes in a single transaction. For example, if the header tax code is a composite tax code, made up of 6 component tax codes, and there are also items with their own line-item tax codes, you could have nine different line-item tax codes before reaching the limit of 15 (6 components + 9 line-item codes).
Line-item and component tax amounts track ’Non-taxable’ sales at the line-item level. This allows you to assign tax codes to non-taxable items so you can track non-taxable sales for certain merchandise types. For example, if you want to track non-taxable sales such as fishing licenses, you can assign a unique line-item tax code to the item.