Sales Tax Exception Groups Overview

Tax exception groups identify products that are taxed outside the normal tax rules for selected customers. For a tax exception to apply, you need to:

Create the group and the locations to which it applies.
Assign the group to the customer purchasing the product, unless the exception group applies to all customers.
Assign the group to the product or price line being purchased.

You can override geocodes for tax jurisdictions to specify whether the rate for override geocode applies to the state, county, city, or local tax jurisdictions. You can set each jurisdiction to either collect the full rate or collect zero (0) tax, and only apply the override geocode to certain jurisdictions as needed.

You can assign tax exception groups to customers based on their location or tax jurisdiction.

You can assign a tax exception group to a product record. A product in a tax exception group can be always taxed, subject to a reduced tax, or never taxed. You can also assign a tax exception group to a price line record when the group includes all products in the price line.

When creating or updating tax exception groups, you can use the geocode search functionality to select and display any combination of geocodes and zip codes. Then, once selected, these can be inserted into the tax exception group maintenance selection parameters. For example, you can select geocodes for all counties within Colorado, or for a zip code within a specific city.

Example 1: Create a tax exception group that applies to certain customers and products

If restaurants do not have to pay taxes on paper goods, you would set up the tax system as follows:

Create a tax exception group called RESTAURANTPAPER.
Assign the exception group to all paper products.
Assign the RESTAURANTPAPER exception group to each of your restaurant customer records. If a limited number of zip codes, geocodes, or states are defined on the Tax Exception Group Maintenance screen, verify that the customer tax jurisdictions are included in the list.
Flag the RESTAURANTPAPER exception group as being never taxable in the product records that belong to this group.

Example 2: Making a product non-taxable for all customers in a state

To make a product non-taxable for all customers in a state, set up the tax system in the following way:

First, create a tax exception group. Set the Customers Exempt field to Y and enter the state in the Zip Codes/Geocodes/States field.
Then, in the product or price line record that will be non-taxable, flag the exception group as being never taxable.