This chapter covers the following topics:
This chapter includes the following two sections:
Sales Tax
Property Tax
Lessors collect sales taxes from customers and make payments to tax authorities. Sales tax is applicable to lease contracts based on the laws enacted for each jurisdiction in which taxable events occur. Taxable events occur throughout the life cycle of a contract or asset.
Oracle Leasing and Finance Management integrates with Oracle E-Business Tax to provide a single point solution for transaction-based tax service needs. Oracle E-Business Tax is the solution for content, determination, recording, administration, and information services. E-Business Tax is an application based on a single data model that encapsulates fiscal and tax rules for a single point solution, providing automation, integration, and collaboration throughout the E-Business Suite. E-Business Tax is the only application that serves as an engine for transaction-based taxes for other applications in the E-Business suite. Before you can fully integrate Leasing and Finance Management with E-Business Tax, you must complete the required Leasing and Finance Management setups.
Transaction-based tax compliance is the legal obligation of lessors for all tax jurisdictions in which they do business. Transaction based taxes have different names in different countries and jurisdictions. Examples of transaction-based taxes are Sales Taxes in the US, GST and PST in Canada, VAT in Europe. The appropriate jurisdiction laws dictate the need to correctly calculate, invoice, collect, and remit transaction-based tax.
Leasing and Finance Management generates transactions on specific events that happen during the lifecycle of a lease contract. The lessor is responsible for correctly calculating, collecting, and remitting transaction-based taxes for these transactions based on leasing specific tax requirements within the various applicable jurisdictions. The lessor is also responsible for validating, calculating, and paying taxes for transactions that result in creation of payables invoices. These invoices are used to pay suppliers for equipment, service, and maintenance and pass-through charges.
Integration with E-Business Tax enables you to perform the following:
Capture tax determinants and map to tax call parameters
Import precalculated upfront tax
Process tax events from Procure to Pay transactions
View detailed tax results and calculations
For information on E-Business Tax, see the following guides:
Oracle E-Business Tax User Guide
Oracle E-Business Tax Implementation Guide
Oracle E-Business Tax: Guide to Integrating with Taxware Sales/Use System
Oracle E-Business Tax: Guide to Integrating with Vertex Q-Series
Tax calls are made to the E-Business Tax engine from Leasing and Finance Management to calculate sales tax. Leasing and Finance Management supports the following three types of tax calls:
Upfront Tax – tax is calculated for a contract at the time of booking/rebook, sales quote, and asset location change tax events. Upfront tax call is made with reference to the payment stream defined for contract header and asset line of the contract. Fee line, service lines, insurance line, and UBB lines are excluded from upfront tax calculation.
Invoice Tax – no invoice tax calls are made from Leasing and Finance Management. Tax calculation is done in Receivables. Leasing and Finance Management passes tax parameters to Receivables for tax calls on the Leasing and Finance Management invoices.
Tax Schedule – schedule of invoice amount and related tax amount is prepared for a given period
You set up the details of upfront tax calculation at the asset line level. Leasing and Finance Management processes upfront tax using the following:
Bill Upfront Tax – Upfront tax is billed to lessee as a tax-only invoice in Receivables.
Financed Upfront Tax – A financed fee is created for the amount of upfront tax that is set to Financed. You must define payments for the financed fee.
Capitalize Upfront Tax – A capitalized fee is created for the amount of the upfront tax that is set to Capitalized.
Leasing and Finance Management generates transactions during the life cycle of contracts and the assets after the assets are terminated from the contract. The lease contract and asset related transactions are taxed according to the laws in a jurisdiction, which vary across countries and different tax jurisdictions. The appropriate jurisdiction laws dictate the need to correctly calculate, invoice, collect and remit transaction-based tax.
Leasing and Finance Management generates transactions that result from specific events, some of which are defined as taxable events in Leasing and Finance Management. The taxable transactions require the calculation of taxes on corresponding transactions. Leasing and Finance Management integrates with Oracle E-Business Tax in the Oracle E-Business suite for its tax calculation and the recording of tax on leasing transactions
Leasing and Finance Management supports the following transaction type scenarios for tax calculation:
The transaction is generated in and the tax is calculated in Leasing and Finance Management: This is the case for transactions like booking, rebook, and sales quotes. When the transactions are generated and recorded in Leasing and Finance Management, Leasing and Finance Management determines the E-Business Tax attributes of the transactions, and makes tax calls to E-Business Tax application.
The transaction is generated in Leasing and Finance Management, but the tax is calculated in the application in which the transaction is finally recorded: This is the case for transactions like billing, credit memo, funding, and disbursement. The transactions are generated in Leasing and Finance Management, but interfaced to Oracle Receivables or Oracle Payables to create invoices, credit memos, or debit memos. Leasing and Finance Management determines the tax attributes of the transaction and passes them to Receivables or Payables where the tax calls are made.
Leasing and Finance Management has enabled certain transactions for tax calculation. Leasing and Finance Management derives E-Business Tax values only for the tax-enabled transactions. The following table describes taxable lease transactions in Leasing and Finance Management. The first column lists the tax-enabled transaction type. This table also shows from where tax calls are generated for different transaction types.
| Transaction Type | Application Event Class | Tax Event Class | Tax Call Origin | Tax Reported? |
|---|---|---|---|---|
| Asset Relocation | Asset Relocation | Booking | Leasing and Finance Management | Yes |
| Booking | Booking | Booking | Leasing and Finance Management | Yes |
| Rebook | Rebook | Booking | Leasing and Finance Management | Yes |
| Sales Quote | Sales Quote | Booking | Leasing and Finance Management | No |
| Tax Schedule | Tax Schedule | None | Leasing and Finance Management | No |
| Estimated Billing | Estimated Billing | None | Leasing and Finance Management | No |
| Billing | Invoice | Sales Transaction | Receivables | Yes |
| Credit Memo | Credit Memo | Sales Transaction | Receivables | Yes |
| Release Billing | Invoice | Sales Transaction | Receivables | Yes |
| Release Credit Memo | Credit Memo | Sales Transaction | Receivables | Yes |
| Rollover Billing | Invoice | Sales Transaction | Receivables | Yes |
| Rollover Credit Memo | Credit Memo | Sales Transaction | Receivables | Yes |
| Funding | Standard Invoices | Purchase Transaction | Payables | Yes |
| Disbursement | Standard Invoices | Purchase Transaction | Payables | Yes |
| Debit Memo | Debit Memo | Purchase Transaction | Payables | Yes |
The taxibility of leasing transactions, whether it is a contract booking transaction or a contract billing transaction, is dependent on the lease parameters you enter. Lease parameters are recorded on the contract or the leasing transaction itself. Leasing and Finance Management enables you to map set one or more leasing parameters with the following three additional E-Business Tax attributes.
Transaction Business Category
Product Category
User Fiscal Classification
The following table explains which lease parameters can be associated with which E-Business Tax attributes.
| E-Business Tax Attributes | Leasing and Finance Management Parameters | Tax Call Origin |
|---|---|---|
| Transaction Business Category 1-5 | Tax event class, Stream Type, Transaction Type, Book classification, Taxation Country | Leasing and Finance Management Receivables Payables |
| Product Category 1-5 | Stream Type, Purchase Option, Interest Disclosed, Transfer of title, Purchase of Lease, Sale Leaseback, Taxation Country | Leasing and Finance Management Receivables |
| Intended Use | Usage of Equipment | Leasing and Finance Management Receivables |
| Product Fiscal Classification | Inventory Item | Leasing and Finance Management Receivables |
| User Fiscal Classification | Stream type, Transaction Type, Financial Product, Termination quote type, Termination Quote Reason, Purchase Option, Interest Disclosed, Transfer of title, Purchase of Lease, Sale Leaseback, Vendor Location, Usage of Equipments, Age of Equipment, Taxation Country | Leasing and Finance Management Receivables |
| Product Type | Goods, Service | Leasing and Finance Management Receivables Payables |
Leasing and Finance Management derives a default taxable basis amount for each tax call. The default tax basis amount is given in the table under each tax event. You can override the default tax basis amount by associating a formula with a transaction type in the Tax Basis Override page.
Leasing and Finance Management evaluates formulas associated with the transaction type of the tax event. If a formula is associated with a transaction type, the amount evaluated by the formula overrides the default tax basis amount.
To set up or update a tax basis override, see Set Up Business Tax Override, Oracle Leasing and Finance Management Implementation Guide.
Before Leasing and Finance Management can calculate taxes, you must define the tax details and complete the tax setup steps. To set up sales tax, see Set Up Sales Tax, Oracle Leasing and Finance Management Implementation Guide.
When creating a sales quote, you can estimate future tax calculation. Sales tax can be calculated at any time before or on acceptance of the quote. When financing the sales tax, you can determine what part of the tax to finance for the financed tax fee amount.
An Upfront tax call is generated when a sales quote is priced. You can also generate a tax call manually in the Pricing tab. You have the option of creating financed or capitalized fees for an upfront tax amount.
The following table describes conditions for a tax call during the Leasing and Finance Management lease sales quote process.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Lease Sales Quote | Quoting | One for each header/line payment stream, if available. | Upfront Tax | Contract Start Date | The financed or capitalized tax amount determines the fee line amount. | Sum of each Payment Stream | Estimated |
When authoring a contract, you create new sales tax details on the contract terms and conditions. You can calculate tax any time before activation of the contract to determine whether to bill or finance the tax amount at the contract line level. When you activate the contract, Leasing and Finance Management automatically calls the Oracle Receivables tax engine to calculate taxes.
To create sales tax details on a contract, see Create Sales Tax Details.
When booking a contract, you can create new sales tax details on the contract terms and conditions. These details default onto the contract lines if the Update Lines From Contract Header check box is selected.
You can calculate tax any time before the activation of a contract. You can determine whether to bill or finance the tax amount at the contract line level. Upon activation of the contract, a tax call to the Oracle Receivables tax engine will be made automatically.
Upfront tax calls are generated when the contract is validated and activated. The tax schedule for the life of a contract is also generated on contract activation.
The following table describes contract booking events and sales tax calls.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Contract Activation (Upfront tax call on activation is removed) |
Booking | One call for contract header and one call for each asset line. | Upfront Tax | Contract Start Date | Bill, Finance, or Capitalize Upfront Tax | Sum of each Payment Stream | Actual |
| Contract Activation | Tax Schedule | One call for each payment amount at the contract header/lines level. No tax call for insurance payments and UBB values. | Tax Schedule | Stream Element Date | None | Stream Element Amount | Estimated |
| Contract Validation (No tax call on validation. Tax calculation is manual after validation.) |
Booking | One call for contract header and one call for each asset line. | Upfront Tax | n/a | n/a | n/a | n/a |
The following conditions apply to sales tax and contract validation:
Upon validation of a contract, Leasing and Finance Management creates financed or capitalized fee lines with an amount equal to the total financed or capitalized tax amount, and with the Sales Tax Fee field set to Yes, if upfront tax for any asset is set to financed or capitalized.
You can bill upfront tax on some assets and finance upfront tax on others. You can also bill upfront tax on some assets and capitalize upfront tax on others. However, you cannot finance upfront tax on some assets and capitalize upfront tax on other assets
If the asset upfront tax field is null for any asset, the value for that field on the contract terms and conditions is used for processing the upfront tax.
A contract cannot have more than one Sales Tax fee line.
The sales tax fee line amount must be equal to the total financed, or capitalized, tax amount for all assets.
If a sales tax fee line exists at the time of validation of contract, Leasing and Finance Management does not modify the sales tax fee line with the new fee line amount, if the amount of the fee line is different from the financed, or capitalized, tax amount. You must update the fee line manually.
The sales tax financed fee line must have a corresponding payment defined.
The financed or capitalized fee line must be associated with assets for which the tax is financed or capitalized. The Sales Tax fee line amount must be equal to sum of amounts for all associated assets.
The following conditions apply to sales tax and contract activation.
Contract activation brings up an error message if the sales tax fee line amount is not equal to the total financed, or capitalized, tax amount for all assets calculated on activation of the contract.
The Billed upfront tax amount calculated upon the activation of contract may differ from the upfront tax amount calculated on the validation of the contract. Leasing and Finance Management creates a tax-only invoice for the tax amount upon activation of the contract.
A Tax Schedule call creates a tax schedule request transaction, which is linked to tax schedule. The tax schedule generated upon activation of a contract is displayed in the Lease Center.
When you rebook a contract, Leasing and Finance Management creates two tax lines. One tax line is used for the tax amount determined and returned by the Oracle Receivables tax engine for the rebook tax call. The second tax line is used to reverse the previous booking and rebook tax call with a negative tax amount. You can bill or finance any of the tax lines on rebook.
When you finance the tax, the financed tax fee line amount cannot be negative or zero, and the default values for bill or finance attributed for each tax line are derived from the previous booking and rebook.
Upfront tax calls are generated when rebook contract is validated and activated. In addition, the tax schedule for the life of the contract is also generated on rebook contract activation. The following table describes rebook contract tax calls.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Reebook Contract Activation | Booking | One call for contract header and one call for each asset line. | Upfront Tax | Start Date of the Original Contract | Bill, Finance, or Capitalize Upfront Tax | Sum of each Payment Stream | Actual |
| Rebook Contract Activation | Tax Schedule | One call for each payment amount at the contract header/lines level. No tax call for insurance payments and UBB values. | Tax Schedule | Stream Element Date | None | Stream Element Amount | Estimated |
| Rebook Contract Validation | Booking | One call for contract header and one call for each asset line. | Upfront Tax | Start Date of the Original Contract | Financed or Capitalized tax amount determines the fee line amount. | Sum of each Payment Stream | Estimated |
The following conditions apply to rebooking a contract in Leasing and Finance Management.
An Upfront tax call is generated upon rebook contract validation and upfront tax and tax schedule calls are generated upon contract activation.
All conditions specified under in the Contract Validation and Contract Activation for Contract Booking sections above are applicable to rebook of contract.
You cannot change the tax detail fields of existing asset lines.
If a new asset line is added to a contract, you can create asset level tax details. You can choose to bill, finance, or capitalize the upfront tax subject to the conditions mentioned above in Contract Booking.
You must update the sales fee line amount if the amount of the fee line is different from the financed, or capitalized, tax amount as calculated upon rebooking the contract.
If the billed upfront tax calculated on the rebook is different than the billed upfront tax on the original contract, Leasing and Finance Management generates a tax-only invoice, or credit memo, for the different tax amount. The invoice or credit memo generated includes the rebook transaction date.
In case of a mass rebook, the differential upfront tax is billed and an invoice or credit memo is generated.
An upfront tax call is generated when an asset location is changed in the Lease Center. Only the request for asset location is generated from Vendor Self Service or Customer Self Service. The upfront tax is calculated in a new location, and the tax amount calculated is billed. The financed or capitalized options are not available for asset location change.
The date of an asset location change can be the current date or a prior date, but the prior date cannot be before the date of the last asset location change.
The following table describes an asset location change tax call.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Asset Location Change | Asset Relocation | One call for contract header and one call for each asset line. | Upfront Tax | Change of Location Date | Bill Upfront Tax | Sum of each Payment Stream | Actual |
No tax is generated on an asset split transaction. New asset lines are created to replace the existing asset line on the contract if the asset split is by components. If the asset split is by units, the existing asset is changed and new assets are created as necessary. Asset level sales tax details on the original asset should propagate to all of the assets generated as a result of the asset split.
Leasing and Finance Management generates a new set of asset-level upfront tax lines for each asset line that is active after an asset split. These upfront tax lines are active after the asset split transaction. For example, if split asset A results in assets A1 and A2, a set of new asset-level upfront tax lines is generated for assets A1 and A2. The status of the asset level upfront tax lines associated with the original asset before the split changes to Inactive. Contract level tax lines remain Active and are not changed.
A new set of tax lines is derived from the upfront tax lines that existed for the original asset before the split. The tax and taxable amounts are split in the ratio of the split asset cost. The other details of the original tax lines remain the same in the new set of tax lines.
Invoice tax and tax schedule lines are not affected by asset split transactions.
The following table describes a split asset sales tax call.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Split Asset | Split Asset Tax | No call is made to the tax engine. | Upfront Tax | Split Asset Transaction Date | Split of Tax Lines | n/a | Actual |
An invoice tax call is generated when a termination quote is created or updated. An invoice tax call is also generated on the creation of a billing transaction when a termination quote is accepted.
An invoice is created when the quote line amount is positive and a credit memo is created when the quote line amount is negative. Tax is recalculated for the whole quote when a quote line is updated or deleted.
The following table describes a termination quote sales tax call.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Termination Quote Creation/Change | Billing Credit Memo | One call for each quote line | Invoice Tax | Quote Effective From Date | None | Quote Line Amount | Estimated |
A tax schedule can be generated upon booking and rebooking or on the activation of a contract. A tax schedule can also be generated manually in the Lease Center.
The following table describes tax schedule events.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Contract Activation | Tax Schedule | One for each payment amount at the header or line level. No tax call for insurance payments and UBB lines. | Tax Schedule | Stream Element Date | None | Stream Element Amount | Estimated |
| Rebook Contract Activation | Tax Schedule | One for each payment amount at the header or line level. No tax call for insurance payments and UBB lines. | Tax Schedule | Stream Element Date | None | Stream Element Amount | Estimated |
| Generate Tax Schedule | Tax Schedule | One for each payment amount at the header or line level. No tax call for insurance payments and UBB lines. | Tax Schedule | Stream Element Date | None | Stream Element Amount | Estimated |
Leasing and Finance Management enables you to select the billing method for specific sales contracts. Contracts can be negotiated to pay the sales tax for the entire lease term upfront and capitalize the sales tax. You can define streams on which no upfront tax is applicable when upfront tax has been applied. While upfront tax and periodic tax are not part of the yield calculation, the upfront tax, both partial and full, is financed and the finance line and payments are included in the yield calculation.
When you apply upfront tax, it may be billed to the lessee or financed as a fee on the contract, and the upfront tax must be specified for each stream. In general, upfront tax is not calculated on billing for the specified streams. For example, upfront tax may not be calculated for a rent stream, but is calculated for other streams. In some cases, both upfront tax and tax on stream billing are applicable.
Sales tax details can be updated to change tax rates, the party responsible for collecting and reporting the taxes, or the customer’s tax exemption status.
The following table describes billing sales tax calls.
| Event | Transaction Type | Tax Calls | Tax Call Type | Tax Date | Tax Processing | Default Basis Amount | Estimated or Actual |
|---|---|---|---|---|---|---|---|
| Billing | Billing Credit Memo | Invoice Line Amount | Invoice Tax | Invoice Date | Bill Invoice Tax with an Invoice | Invoice Amount | Actual |
| Billing/Remarketing | Billing | Invoice Line Amount | Invoice Tax | Invoice Date | Bill Invoice Tax with an Invoice | Invoice Amount | Actual |
| Billing/Vendor Repurchase Quote | Billing | Quote Line/Contract Line Amount | Invoice Tax | Invoice Date | Bill Invoice Tax with an Invoice | Invoice Amount | Actual |
| Billing/Vendor Cure | Billing Credit Memo | Invoice Line Amount | Invoice Tax | Invoice Date | Bill Invoice Tax with an Invoice | Invoice Amount | Actual |
| Asset Repair | Billing Credit Memo | Invoice Line Amount | Invoice Tax | Invoice Date | Bill Invoice Tax with an Invoice | Invoice Amount | Actual |
Lessees can view tax rates, amounts, and actual tax billed for each contract in the Lease Center. You can view tax details in Leasing and Finance Management at the following points:
Upfront tax details for a contract can be viewed from the Total Sales Tax Amount field in the Contract Booking page.
Invoice tax details can be viewed from Invoice Tax Amount in the Invoice Tab.
Invoice tax details can be viewed from Invoice Tax Amount in the Lease Center
Invoice tax details can be viewed from Invoice Tax Amount in Customer Self Service and Vendor Self Service.
Tax schedules can be viewed in the Lease Center.
To create or update sales tax details for a contract, perform the following tasks.
Navigate to the Contract link in the Contacts subtab of the Origination tab.
Select your contract.
Click Terms & Conditions.
Click Taxes in the Additional Information column.
Enter your sales tax details.
Click Update.
The following table describes sales tax parameters.
| Field | Description |
|---|---|
| Update Lines from Contract | If you select this checkbox, the sales tax details you enter in this region will default to the asset line level when you create an asset. If you copy an asset from another asset, the new asset will contain details from the copied asset, not from the default. |
| Interest Disclosed | Select if the interest amount payable on the contract has been disclosed to the customer. |
| Transfer of Title | Select if title to the assets has been transferred to the customer on the start of the contract. |
| Sale and Lease Back | Select if an asset on the contract has been purchased from customer, the lessee, at the start of the contract. |
| Purchase of Lease | Select if the lease has been purchased from another lessor. |
| Usage of Equipment | The nature of the usage of equipment. |
| Age of Equipment | The length of period of use. |
| Asset Upfront Tax | Determines whether the sales tax is Billed, Financed, or Capitalized. |
| Billing Stream Type | Select the stream type for the defined asset line above. |
| Financed Fee Stream Type | Select the stream type for the defined asset line above. |
| Capitalized Fee Stream Type | Select the stream type for the defined asset line above. |
Property tax is a tax on property owned levied by a tax authority. Leasing and Finance Management enables you to bill lessees for estimated property taxes, make payments to the tax authorities, import actual property tax information, and bill adjustments resulting from the difference between the estimated and actual property tax amounts. You can also associate estimated property tax payments to assets. Leasing and Finance Management property tax billing is generated through Oracle Receivables and payments of actual property tax are disbursed through Oracle Payables.
In Leasing and Finance Management, you define property tax details at the operating unit, contract, and asset levels. You can override default settings for property tax at the contract or asset levels. Estimated property taxes can be defined on both lease sales quotes and lease contracts. The estimated property tax is excluded from contract yield or interest calculations, is effective on or after the contract start date, and cannot precede the start date or exceed the end date of the asset line.
Property taxes can also be imported from third party applications and the actual property tax can be reconciled to the estimated property tax billed for each asset.
Estimated property tax defaults can be defined at the operating unit level and you can override the defaults when you author contract terms and conditions and create assets.
Before property tax can be calculated, the correct property tax details must be setup. To set up property tax, see Set Up Property Tax, Oracle Lease Management Implementation Guide.
When you create user-defined streams for property tax receipts and payments, the stream types must be billable and associated to the Fee Payment stream purpose. The property tax receipt and payment streams are generated at the asset level. Property tax streams are not included in funding, are not used for expense or income streams, and are not used for passthrough streams.
For more information on streams, see Streams Overview.
You can invoice property tax to the lessee based on the estimated amount, the actual amount, or both.
Leasing and Finance Management can import actual property tax details from third party applications. To import actual property tax details, the following prerequisites must be met.
The stream type purpose must be Actual Property Tax
Select Yes in the Property Tax Applicable field.
Define the tax authority in the import data as a tax vendor in Oracle Payables.
To upload actual property tax, you must import files from the third party application.
You can create a lease sales quote with estimated property tax payments associated to assets. When you create a contract from the sales quote, the estimated property tax details are carried from the quote to the contract.
To place estimated property tax on a sales quote, see Create a Lease Sales Quote.
You can override property tax details set up at the operating unit level when you author a contract or you can chose to use the default property tax details. You can also override property tax details set up at the asset level.
To define property tax on a contract, see Contract Authoring Overview.
To override property tax details set up at the asset level, see Contract Authoring Overview.
To make property tax payments to tax authorities, you create payable invoices for tax liability in Oracle Payables after the actual property tax is imported. A separate invoice is created for each tax authority to which tax is payable.
To create Payables invoices for property tax liability, see the Oracle Payables User Guide.
When there is a difference between the estimated property tax billed and the actual property tax paid, you can reconcile the shortfall or excess recovery of property tax on asset termination. You run the Property Tax Reconciliation Report on asset termination when you select Estimated and Actual for the property tax bill-to attribute for the asset.
The Property Tax Reconciliation Report compares the estimated property tax billed to the actual property tax paid to calculate the amount of property tax billed short or in excess. When the property tax billing is short, an adjusted property tax is billed. When the property tax billing is in excess, the adjusted property tax results in a credit memo.
You can run the Lease Property Tax Report to view the estimated property tax billed and the actual property tax imported. The Lease Property Tax Report can be run by contract or by asset.
When you terminate an asset, you can reconcile the estimated and actual property tax if the bill-to attribute is set to Estimated or Actual. On reconciliation, if the actual tax is more than the estimated tax, you can create an invoice for the underpayment. If estimated tax is more than the actual tax, you can create a credit memo for the excess collected.
When an asset is terminated, the termination quote calculates the estimated property tax for quote lines. The termination quote determines the estimated property tax amount based on a fixed amount or a formula. You can modify the seeded formula to calculate the estimated property tax amount on the termination quote.
The Lease Center displays all property taxes billed and the property tax details, including the estimated property tax billed, the actual property tax billed, and the property tax adjustments billed. To view property tax details, see the Lease Center.