we are new to Epicor and testing in pilot.
We were told by our consultant that there was no way to not compute sales tax on select parts. That’s functionality that we need as most of our parts are nontaxable. We’ve setup a ‘nontaxable’ tax category and we think all the pieces needed for the tax category but nothing seems to work.
Is the consultant correct that this is not part of out of the box Epicor?. Or are we just missing some setup steps?
Any help would be appreciated.
Rich, are you saying there are certain parts that are non-taxable and you want to make it so that the tax category assigned is non-taxable depending on the part?
I know how to assign ‘nontaxable’ category to individual parts. But when I create an order with the nontaxable part Epicor still computes sales tax. I suspect a setup issue but not sure what I might be missing
See if this thread helps at all:
Are you guys using Tax Connect (Avalara) or another taxability add-on to Epicor?
No we are using base functionality to manually setup taxes
As noted we’re not using any addons like Tax Connect. this is out of the box Epicor.
I think the built-in standard way to do this would be to go into Tax Type Maintenance, and on each rate on each tax type, create an exemption for the product tax category that should be exempt from that tax type. You’ll also need to have product tax categories that are granular enough for this.
Sorry well then yeah, like @ckoch said it seems like unless there’s some major bug you do this in the way specified by @ckoch
We just got done testing Tax Connect and are going live with it shortly. I can’t explain how much easier it is having Avalara handle the taxes rather than setting it up and maintaining it manually through Epicor native. If you do any sales in California, that alone makes Avalara worth it.
Highly recommend looking into it if you haven’t already.
I did it manually, like you are asking, for years; it’s very doable. (But we use Avalara now.) I had exemptions for freight if this state but not that state, etc. All the tools are there; they are the same tools used by Avalara.
Freight, I hope is done with a misc charge (not a part number, ugh), and there are places to set that up.
But the bulk of what you need is done through the product group - and I mean the one on the sales order. This is how you get control over line items.
Customers and ship-to’s can also get tax categories.
Now, all that said, there is no way on earth you will ever get this right unless you have only 4 customers (and one ship-to each). Taxes are DESIGNED to be impossible to keep up with. You will lose this battle.
But I get it, someone else makes the decision to buy software, so you just have to do your best.
And even Avalara only believes what you tell it, and users are fantastic at lying to it.
That’s what pushed us over the edge to go Avalara.
Understand about taxes being complicated in general. But in our case we only collect sales tax in two states with flat rate taxes. For now it’s pretty straight forward if I can get the nontaxable on products working.
Then @JasonMcD’s suggestions above is the way to go.
[I added the bold]
So, I spied a bit - your company looks like it ships all over the US.
We also ship to all 50 states, but we don’t collect taxes in all states, either. I get it.
However, a bit of free advice, I almost guarantee you need to be registered in more states than just 2.
You must collect taxes when a state… feels… that you should. It’s slightly deeper than that, but not much.
New York, I think you just need to send 2-3 employees to a trade show for a week and you now have to start collecting taxes there.
But normally it’s along the lines of $100k in sales to that state. It’s irrelevant whether the sales themselves are tax-exempt (like to a reseller). It’s gross sales that usually matter.
Edit: Meant to add, the term is “establishing economic nexus” in a state.
Add to that, if you have remote employees. You may have to collect tax for a state just because you have a remote worker there. It immediately creates the tax nexus.
(Not necessarily the views of my company.)