Configuring Sales Tax Options for Product Pricing

This topic describes how to configure a product's tax-related options, such as how to mark a product as taxable. It includes the following sub-topics:

• Marking a Product As Taxable
• Including Tax within a Product's Price

Marking a Product As Taxable

Follow these steps to indicate that a new product is taxable:

1. Open a new record from the Products service.
2. Complete the top area of the Products form.
   • Specify a name, Product Category, Product Type, and parent product (if applicable).
3. Click the Accounting tab.
4. Select the Taxable option.
5. Complete the other fields on the Products record, as required.
   • See Creating a Basic Products Record for more information on setting up new products in Aptify.
6. Save the new Products record.

   • After you save the product record, the Taxable field cannot be modified.

     A user can only make a product taxable prior to the first save. After a new Products record is saved, a user can no longer modify the Taxable field. Therefore, you should confirm that a product has the Taxable field configured properly before saving the record.

By default, Aptify applies the sales tax for any product that has the Taxable option selected, assuming that the order's Ship To/Bill To parties match a configured Sales Tax Rate.

However, an organization can conditionally tax certain products by establishing Order Line Filter Rules in one or more Sales Tax Rate. Using filter rules, a product may be taxed under one set of conditions but not another. See Specifying Order Lines Filter Rules for details.

Including Tax within a Product's Price

Certain jurisdictions may require that sales tax amounts be included in a product's price. In this case, Aptify can calculate the taxable portion of a product's price and display the applicable tax amount on the order. This section describes how to indicate that a product's price includes tax. See Sales Tax Example: Tax Included in Price for an example of how the system calculates tax when it is included in the product price.

1. Open a new or existing Product record.
   • For new products, configure the product as described in Marking a Product As Taxable. Note that you must identify a product as taxable prior to saving the record for the first time.
   • For existing products, click the Accounting tab and confirm that the Taxable option is selected. Including tax within a product's price is not applicable for non-taxable products. 
2. Click the Prices tab and open a new Prices record.
3. Enter a Name for the Prices record.
4. Enter the Price to charge on the order line.
5. Select the Includes Tax option.
   
6. Configure the other fields in the Prices record as necessary.
   • Configure Filter Rules as needed to define the circumstances under which this price applies. For example, this price may apply to customers who are in only a certain Tax Jurisdiction. If a customer is not subject to sales tax but receives this price due to other matching criteria, then that customer will be charged the entire price (and no implicit tax is included in the calculation).
   • See Assigning Product Prices for more information on specifying a product's price. 
7. Click OK to save and close the Prices record.

8. Save and close the Products record.

Note Concerning Price Includes Tax Calculation

When using the Price Includes Tax option in conjunction with an order line that has both a child sales tax rate and a parent sales tax rate applied (that is, the child rate has the Override Parent Tax Rates option cleared), Aptify calculates the tax amount under the assumption that the child tax includes the parent tax amount in its calculation.

This holds true even if a child Sales Tax Rate has the Include Parent Taxes In Calculation option cleared.  

This topic describes products only from a tax perspective. See Using Product Setup and Maintenance for complete information on creating and working with Products in Aptify.