Auto Assigned Sales Tax Code by State and County

Q: Recently we have set up sales offices in several states, and we'd like to let the system assign sales tax codes by state and county automatically in order to reduce human error.

A: Solutions:

1. Global Setup/A/R Global Control: Fields #1, 5 and 13 should set to "Y."

2. Set up new sales tax codes in the AR Tax Code file with the tax rate and the associated GL Account file.

3. Set up the tax code for the state level (Tax Code - 1): You should indicate the Taxable Tax Code and Non-Taxable Tax Code as well.

    (AR/Maintenance/State Table File Maintenance)

4. Set up the tax code for the county level (Tax Code - 2): 

    (a). Verify that the "ZIP Code File" has been maintained in the System/ZIP Code File. The system will create the code automatically during file initializing.

    (b). Set up the Tax Code - 2 in the County Tax Code File (AR/Maintenance).

4. Some cities may charge sales tax, so you should set up Tax Code - 3 as well.

    Main/Util-Setup/System File Maintenance/City Xref File

 

Keep in mind that Elliott determines the state sales tax code based on the state table, which is distributed and can be regenerated automatically.

Elliott determines the county and city based on the zip code table, which is also distributed.  Usually, with a release of a major new version, Elliott will distribute a new up-to-date zip code table.  The United States Postmaster is constantly adding new zip codes, so there's no guarantee that the zip code table distributed by Elliott has all zip codes.

Also, once in a while, a zip code can cross multiple cities, or even counties.  The county or city assigned in Elliott's zip code database is based on the primary county or city. Therefore, this is one potential area where you may not always get the correct county and city tax codes assigned.  It is advised that you verify this information with your customers as each customer or ship-to record is set up.

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