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Creating Tax Exceptions

You use a tax exception in e-automate to limit the amount of tax that can be assessed, or to define lower and upper limits to the taxes assessed on charges (prices). You can create and use three different types of exceptions: Invoice, Tax Flag and Item Unit exceptions. All three can be used simultaneously for your taxing circumstances. If you do use all three, e-automate will calculate the lowest tax that should be charged to the customer based on your exception definitions starting with the Item Unit, then the Tax Flag and finally the Invoice exception.

The Invoice exception is used with individual invoices. The Invoice exception defines the maximum calculated tax amount that can be assessed on an invoice per tax authority. e-automate calculates the taxes as usual for each tax authority and then applies the exception rule to each authority. With the authorities calculated, e-automate sums up the tax for each tax authority and displays it on the invoice.

Also available to limit taxes is the Tax Flag exception. The Tax Flag exception can be defined either by Tax Limit or Tax Basis. You use Tax Limit to limit the maximum dollar amount of tax that can be charged to a customer. The Tax Basis is used to define lower and upper limits on the charges (prices) that a customer is assessed taxes. For example, you could specify a limit using the Tax Basis rule and set a lower limit of $0 and an upper limit of $500. If you had specified such a range of $0 - $500, and then set a charge amount of $250, e-automate would tax $250 dollars of the charge (price). If you were to charge an amount of $600, e-automate would assess taxes on $500 because $500 falls within the taxable range. The system would not tax the remaining $100 because it falls outside the taxable range. If you wanted to specify a different tax for amounts over $500 you would then create a second tax authority with the Tax Flag exceptions defined for the range above $500.

Another feature of the Tax Flag exception allows e-automate to group charges (item prices) that share the same tax flag together before it applies the Tax Limit or the Tax Basis rules. This rule applies on all invoices in e-automate from Sales invoices to Service invoices. e-automate groups charges (prices) linked to the same tax flag and then applies the Tax Flag exception.

The last type of exception is the Item Unit exception. You can define this exception using Tax Limit or Tax Basis as described above. The Item Unit exception is unique because it is applied at the individual charge (item) level. This exception handles one charge at a time. If you have added more than one of the same charge (item) on an invoice, e-automate looks at each quantity of an item (charge) individually to apply the exception. With all the individual charges calculated e-automate sums up the charges and displays the tax on the invoice.

If the e-automate interface does not accommodate your tax rules, contact Customer Care for assistance. Customer Care can work with you to add customized tax flags and/or taxing procedures for a fee.

Getting to the TransactionGetting to the Transaction

From the Tools menu, select Lists and Codes to open the Lists and Codes window.

In the Select a list or code type field, use the drop-down menu to select Tax Exceptions.

Click [New] to open the New Tax Exception window.

Basic InformationBasic Information

Complete the following fields as appropriate:

Name: Name of the tax exception.

State: The state or province in which this tax exception exists.

Description: Description of the tax exception.

In the Type field, use the lookup to select the type of exception you are creating. You can create an Invoice, Tax Flag, or Item Unit.

Select the Built-in Exceptions radio button.
Note: You can only choose Use Stored Procedure if you have consulted with ECI Software Solutions and have contracted with them to create and install a stored procedure for use with taxation. If you have not arranged for a stored procedure, you can only use the Built-in Exception choice. For customers that have a stored procedure, identify the name of the stored procedure in the Procedure Name field once the Use Stored Procedure choice has been selected.

Do ONE of the following:

Select Tax Limit.
Note: If you are creating an Invoice exception you can only choose Tax Limit.

In the Max field, enter the maximum dollar amount of tax that can be charged per Invoice, Tax Flag or Item Unit depending on the kind of exception you are creating.
Note: If you are creating an Invoice exception, the Max field applies to the invoice sub-total. If you are creating a Per Tax Flag exception, the Max field applies to all charges (items) on the invoice that share the same tax flag. If you are creating an Item Unit exception the Max field applies to each individual item.

Select Tax Basis. You use the Min and the Max fields to define the range of charges in which tax can be assessed.

In the Min field, enter the minimum amount charged to a customer that can be assessed tax.
Note: Prices less than the Min will not be assessed tax.

In the Max field enter the largest charge that can be taxed.
Note: Charges more than the Max value will not be assessed tax unless you have an additional authority defining taxation for that range. Taxes are assessed in e-automate on any amount that falls within the defined range. For example, if you had specified a range of $100 - $500, and then set a charge amount of $250, e-automate would tax $150 dollars of the price because only $150 falls within in the range.

Completing the TransactionCompleting the Transaction

Click [OK] to save the tax exception. For more information on creating tax exceptions, see Additional Info - Handling Multiple Ranges and Additional Info - Using More Than One Exception.