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Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax System Implementation Guide
Release 12.1
Part Number E13632-03
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Business Processes

Transaction Options in Oracle Receivables

If you have integrated with a tax service provider, these actions are not required for Receivables transactions:

Working with Service Provider Tax Jurisdiction Codes

Service providers may use their own tax jurisdiction code to identify a taxing jurisdiction. A service provider jurisdiction code is typically needed when the zip code of an address does not uniquely identify the exact taxing jurisdiction. For example, the same city and zip code may have two or more different taxing jurisdictions in different geographical areas within the same zip code. For such zip codes, you should enter the service provider tax jurisdiction codes when you enter your customer addresses.

See: Address Formatting, Oracle Trading Community Architecture User Guide for information about entering customer addresses.

Vertex

Vertex uses the term geocode for tax jurisdiction codes. The geocode is an internal code that is understood by the Vertex integration. The geocode is a nine-digit numeric code that is composed of a two-digit state code, followed by a three-digit county code, followed by a four-digit code to identify a tax jurisdiction within a city. For example: 12-345-6789.

The Vertex integration uses the Vertex GeoCoder API to retrieve the geocode for a ship-to customer address, if a geocode is not available on the customer address and cannot be retrieved from the E-Business Tax jurisdiction setup. If the GeoCoder API cannot find a geocode, an error is raised.

Taxware

The Taxware jurisdiction code is a nine-digit alphanumeric code. It is composed of the two-character state code, the five-digit zip code, and a unique two-digit numeric code. For example, the code CA9411401 is composed of the state code CA for California, the zip code 94114, and the Taxware jurisdiction code 01.

The Taxware integration retrieves the jurisdiction code either from the customer address or the E-Business Tax jurisdiction setup. If a jurisdiction code is not found, then 00 is passed as the jurisdiction code to the tax calculation API.

Monthly Procedures

Each month tax service providers send an updated version of their data file. You need to upload the data file into both the tax service provider system and the E-Business Tax system. This will ensure that E-Business Tax has the latest information for address validation and tax jurisdiction code/geocode retrieval during tax calculation.

E-Business US Sales and Use Tax Import Program

Use the E-Business US Sales and Use Tax Import Program to upload US sales and use tax updates from your tax service provider. The E-Business US Sales and Use Tax Import Program imports tax content for US sales tax rates at various jurisdiction levels. For example, at the state, county, city, and zip code or zip code range levels. The program also supports the import of incremental tax content.

The system loads the data into the TCA Geography model and into all related E-Business Tax entities, including taxes, tax statuses, tax rates, tax jurisdictions, and accounts. The data the system loads into the TCA Geography model includes master geography data, such as state, county, city, zip or postal code, and their relationships and hierarchy. The system also creates the geography identifiers for alternate city names apart from the geography types and geography nodes.

To upload US sales and use tax data:

  1. Copy the data file from your external service provider (Taxware, LP – A First Data Company or Vertex, Inc.) to a Linux or UNIX directory.

    Note: E-Business Tax loads the data file into the interface table as part of the Request Set, so you do not need to load the data file manually.

  2. Navigate to the Schedule Request Set page.

  3. In the Request Set Name field, select E-Business US Sales and Use Tax Import Program.

  4. Select the E-Business Tax Content Upload File Load Program radio button.

  5. Enter the directory where you have placed the data file and the file name (for example, /home/user/zx/filename.dat).

  6. In the Tax Content Source field, select:

  7. In the Tax Content Source Tax Regime Code field, select the tax regime code to which the data should be imported.

    Note: The data loaded can be shared by other tax regimes. The E-Business US Sales and Use Tax Import Program does not load some entities, such as geography, tax zones, and tax jurisdictions, to specific tax regimes.

  8. Enter the service request schedule parameters.

  9. Submit the request.

Exemption Handling

You can define your customer and product exemptions using a tax service provider, E-Business Tax, or both. At transaction time, if an applicable E-Business Tax exemption or non-jurisdiction based tax exception is found, it is passed to the tax service provider API and applied to the tax calculation. The tax service provider tax repository includes the exempt tax line for complete audit and reconciliation.

If you decide to build your own logic to pass exemptions to the tax service provider, for example, by making use of E-Business Tax fiscal classifications, you can write your own code using PL/SQL. See: Customizable Tax Functions for information customizing the exemption and exception values passed by E-Business Tax.

If the Tax Handling field is enabled on an Oracle Order Management or Oracle Receivables transaction line, you can override the tax service provider setup and identify a transaction as exempt, according to your tax exemption setup in E-Business Tax. See: Setting Up Tax Exemptions, Oracle E-Business Tax User Guide for more information.

Set the eBTax: Allow Override of Customer Exemptions profile option to control the display of the Tax Handling field. See: Setting Profile Option Values, Oracle E-Business Tax Implementation Guide.

Reconciliation and Audit Procedures

Tax service providers return the calculated tax lines to E-Business Tax. The tax lines for Oracle Receivables transactions returned by tax service providers are stored in E-Business Tax similar to the way tax lines calculated by E-Business Tax itself are stored.

Due to the limitations of Vertex and Taxware APIs in accepting the transaction line update details, whenever a user updates a transaction line in Oracle Receivables, two lines are passed to Vertex or Taxware for tax calculation. For example, if the line amount is changed from $100 to $200, because of either quantity or price change, the tax service provider API is called for a transaction line with line amount as -$100 and another line with line amount as $200. The taxes for transaction line of line amount -$100 back out the original tax amounts calculated for the original line amount of $100.

Only approved adjustments of type Tax are synchronized with the tax service providers. This gives you greater control over which adjustments should reduce the sales tax liability. If you have adjustments of type Tax that you do not want to post to the tax service provider repository, see: Using Flexfields and Fields in Other Applications for more information.

Before completing your tax returns using the tax service provider reports, you should reconcile the total tax amounts held in E-Business Tax, Oracle General Ledger, and a tax service provider repository. All Oracle Receivables transactions get stored in the tax service provider repository at the time of tax calculation. Thus, the tax details in E-Business Tax and in a tax service provider repository are always the same. The Oracle Receivables transactions are posted to General Ledger only when they are completed and posted to General Ledger from the Subledger Accounting application. Therefore, before reconciliation with General Ledger, all transactions must be completed and posted to the General Ledger.

You can reconcile the total tax amounts of Oracle Receivables transactions by state to Oracle General Ledger. The total tax amounts by state reported by the Tax Reconciliation Report should reconcile to each state tax liability account held in Oracle General Ledger.

Reconcile total tax amounts by state to the tax service provider repository by running the Vertex Sales Tax Register or Taxware Sales/Use Tax report.

The tax service providers and Oracle Receivables use different terms when referring to the tax calculation date and the accounting date for transactions. This table summarizes these terminology differences:

Value Oracle Receivables Vertex Q-Series Taxware SUTS
Accounting Date GL Date Transaction Date Fiscal Date
Tax Calculation Date Transaction Date Invoice Date Invoice Date

Related Topics

Tax Reconciliation Report, Oracle E-Business Tax Reporting Guide

Support Procedures

Begin with E-Business Tax debug messages to review issues that arise with tax calculation by tax service providers. The debug log contains all the input and output parameters sent and received to and from a tax service provider. The tax service provider returned messages are printed in the debug log after this E-Business Tax introductory message:

An error has occurred in the tax service provider API. Please review the following messages and contact tax service provider support for further action.

This guide does not describe the process of the installation required by tax service providers, reports provided by tax service providers, or upgrades to newer releases. You should refer to the tax service provider’s manuals and documents and contact tax service provider support for details.

Related Topics

System Alerts, Metrics, and Logs, Oracle Applications System Administrator's Guide - Maintenance