I finally got sales tax working with a combination of the Tax Engine edu course, some searching here, & help files. We run Avalara on our main company, but our sister company is much smaller (moving from Quickbooks to Epicor), and will be doing it manually (like we did for Quickbooks).
I’d love to simplify this, since this process will need to be done for every new customer that doesn’t have tax set up for that locality.
Tax Jurisdiction - Set one up for each authority, and define each with a tax type, code is x(10)
Tax Report Category - Enter categories for reporting, x(10)
Tax Type - Create tax type ID, Description, set Jurisdiction and Report Category.
Then create & assign tax rate
Then set effective rate
Set GL Control
Add Exemption for NON-TAXABLE ITEM (set to Fully Exempt, then save, you’ll get 100% exempt)
It’s been a while since we did Taxes manually. Probably over 5 years ago, when we were on V8, that we switched to TaxConnect (Avalera). But don’t remember it requiring that much setup.
Unless you need to use different GL accounts for different Sales Taxes, just set the it at the company level
And setting the Tax Liability for the Customer, just automatically sets that as the Liabilty on new orders. Adding new ShipTo to the customer sets that ShipTo to the same liability as the “main” customer settings. Be sure to update those if they are different than the main.
Exactly! I posted just to see where they went, and it got sent to the review journal. I went back to Tax Type, added the TAX > SALES TAX GL Control, cancelled the RJ, and recalculated tax on the AR Invoice. It worked.
After some digging into GL Trans Type maintenance …
Function Name:
Determine Tax Account for Invoice Line and given Context
Function Text:
Result= Get Account From AR Invoice--Line--Tax--Effective Tax Rate--GL Control For Current Book AND GivenContext Context
If Result is not Valid
Result= Get Account From AR Invoice--Line--Tax--Master--GL Control For Current Book AND GivenContext Context
Looks like that “IF” isn’t happening, or the result of the Master--GL Control is also not valid.
Thanks Calvin. Seems like this only works for Avalara/Tax Connect
EPICOR ANSWERBOOK 12788ESC:
If the GL Control for the GL Type of “Tax” was previously setup and assigned to the applicable Epicor company on the Company Configuration screen, it defaults into all NEW tax types that are automatically created by Tax Connect on the Tax Type Maintenance screen when tax calculations occur for the first time for the applicable tax jurisdictions. The Epicor company’s GL Control for the GL Type of “Tax” only defaults into Tax Type records as they are created by Tax Connect.
A/R invoice groups cannot be posted until the applicable GL Controls have been setup. For invoices and credit memos in the group which reference tax types that are for tax jurisdictions that you have calculated taxes for before , Epicor will try to obtain the GL Control from the applicable tax type record(s) on the Tax Type Maintenance screen. For invoices and credit memos in the group which reference tax types that are for tax jurisdictions that you have not calculated taxes for before , Epicor will try to obtain the GL Control from the GL Type of “Tax” from the Company Configuration screen for the applicable company. If in either scenario at least one GL Control has not been setup that is needed to post a transaction in the invoice group, a Review Journal will be created and the invoice(s) will not be posted since the GL impact is out of balance due to one or more tax-related GL accounts and amounts missing due to the missing GL Control. The invoice group remains (is not deleted) and the invoices in the group (and/or the group itself) show a status of “Reviewing”.
Setting up new taxes in Epicor. I found this post very helpful.
It seems like the jurisdiction and reporting fields are optional? How are you using these and are they worth the extra setup?
Also are you “stacking” multiple taxes from two tax types in the Tax Liability area? State tax of 4% and County tax of 1.5% ? Or are you entering one combined rate in the tax type area?
Seems like there are a couple of ways to do things…
In my opinion, if you are collecting sales tax because you do a lot sales to end-users, then you should really use Avalara. It is the only way to have a foolproof auditable sales tax collection. Otherwise, you are setting yourself up for a sales tax audit that can be very costly. The old days are gone where you don’t have to collect taxes. There are 1000s of tax jurisdictions and nearly daily sales tax rate changes that are impossible to keep up with. Way back in the 1980s I had my first brush with sales taxes… back then, there were almost 50,000 records in the sales tax rate file that we received from a service (on Mag Tape) every month. I think at that time about 5% of the records changed each month.
(that’s my opinion and I am sticking to it).
Thanks Tim. Always appreciate your input. We looked at Avalara and I was at a prior company that did use. It was deemed too expensive for the amount we do.
We reached that same “too expensive” conclusion… until we recognized the potential value related to the “Streamlined Sales and Use Tax Agreement” (SST) and the designation of “Certified Service Provider” (CSP) that is granted by the SST Governing Board to certain companies, of which Avalara is one. Once we determined just how wide the net of economic nexus was going to be for us, it was clear that the cost savings to be realized from implementing Avalara (via Epicor Tax Connect) was substantial. Prior to the Wayfair ruling in June 2018, we had physical nexus in 2 states. Today, almost 3 1/2 years after the ruling, we now have nexus in 40 states, but 23 of those are SST member states which compensate Avalara (as a CSP) for most of the services provided to us.
Thanks for that response Scott I had no knowledge of the SST designation. We have a go live in about 60 days so not sure we will re-evaluate now but may revisit this before the next site go live as we have 5 sites in 4 states and have 30+ states we are setting up in Epicor for taxes. It only takes a few of the by county tax rates states to show how involved this is to setup and maintain.
You are welcome, Brad. I understand your concern with the go-live and your decision to defer re-evaluating. I will just say that we initally chose a different sales tax automation solution and started down its implementation path before recognizing what I mentioned previously. After that recognition, we quickly changed our direction, and considering the extent of our nexus now, that re-direct was a very good choice.
I also understand your concern about county tax rates. Staying compliant with the states’ requirements has been a challenge (to say the least), but becoming and remaining compliant with the local jurisdictions’ requirements has been even more difficult. We have nexus with California, which automatically means we have nexus with all 295 local jurisdictions there, even though we may never have had sales in those jurisdictions. Using Avalara has helped us stay compliant with all of those jurisdictions. California has been tough, but Colorado and Louisiania can be nightmarish (even with Avalara), and I can only imagine what Missouri will ultimately put in place next year!
There is another aspect that I would caution you to consider, if you haven’t done so already, with respect to economic nexus, and that is the basis for the sales thresholds, i.e. whether they are based on total sales or only taxable sales. Using Avalara has helped us monitor when we are approaching applicable thresholds. We have nexus in several states where the thresholds are based on total sales, but would not have nexus with those if their thresholds were based on only taxable sales.
