Chapter 6
Setting Up Taxation
Because it is ultimately the seller organization's responsibility to determine and collect the sales tax for orders, setting up taxation in BuyerXpert/SellerXpert is optional. However, you can set up BuyerXpert/SellerXpert to calculate taxes if required by your users.
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Note
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The information in this chapter is based on the assumption that you have already read the BuyerXpert/SellerXpert Concepts and Release Notes.
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This chapter contains the following sections:
About Administering Taxation
The following taxation options are available in BuyerXpert/SellerXpert:
Choosing not to calculate taxes
Defining a tax adjustment calculation for your organization
Using the TAXWARE software included with the BuyerXpert/SellerXpert distribution media
Administrator's Taxation Tasks
Some of the procedures for administering taxation are contained in this administrator's guide and some are contained in the Admin interface Help.
Table 6-1 contains a list of taxation tasks. The right-hand column provides information about where to find instructions, guidelines, or tools for performing that task.
Defining a Tax Adjustment
In BuyerXpert/SellerXpert, the standard implementation method allows you to define a tax adjustment calculation that is appropriate for your organization.
Follow these guidelines to define a tax adjustment calculation using the Admin interface (field and procedure details are contained in Help):
Select the buyer organization.
Select Pricing.
Select Tax Adjustments.
Follow procedures in Help to complete the task.
Using TAXWARE
Instead of defining a tax adjustment calculation, you can use TAXWARE to calculate taxes in BuyerXpert/SellerXpert.
TAXWARE is a software application that calculates taxes based on shipping point-of-origin, product code, employee state code, and so on. The BuyerXpert/SellerXpert distribution media includes an unregistered version of TAXWARE.
BuyerXpert/SellerXpert includes three TAXWARE components as follows:
SALES/USE Tax System
VERAZIP System
WORLDTAX System
SALES/USE Tax System
Central to TAXWARE functionality, the SALES/USE Tax System automatically calculates sales and use taxes, using zip codes to determine proper rates. The SALES/USE Tax System interfaces with existing order requisitions.
The SALES/USE Tax System includes a Tax Master File that covers all U.S. tax jurisdictions and Canadian provinces. The Tax Master File includes all the sales, use and transit tax rates (carried out to five decimal places). Once you register with TAXWARE, you can receive monthly updates to the Tax Master File to keep the data current.
The SALES/USE Tax System performs a line item tax calculation, on a state-by-state basis. Optionally, the SALES/USE Tax System can generate a detailed audit report for each seller and automatically deliver it to the appropriate seller site. BuyerXpert/SellerXpert provides retrieval, encryption, and electronic mail delivery of sales tax audit reports.
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Note
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The SALE/USE Tax System supports U.S. and Canadian transactions only.
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VERAZIP System
Both the VERAZIP System and the WORLDTAX System interface with the SALES/USE Tax System. VERAZIP verifies addresses by matching state, zip code, city and county information, allowing the SALES/USE Tax System to locate correct taxing jurisdiction.
WORLDTAX System
The WORLDTAX System calculates Value Added Tax (VAT), Goods and Services Tax (GST), sales tax, and consumption tax for most European and many Asian-Pacific and South American countries.
Implementing TAXWARE
If you decide to use TAXWARE with BuyerXpert/SellerXpert, you will need to contact TAXWARE to license the TAXWARE software.
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Note
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BuyerXpert/SellerXpert includes a TAXWARE tax database. This database is for demonstration purposes only and contains data that may be outdated. Neither iPlanet nor TAXWARE, Incorporated are liable for any business decision based on the calculations using the information within the demo. TAXWARE software confidentiality is the responsibility of the employee.
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When you install BuyerXpert/SellerXpert, you also install the TAXWARE components.
The following sections explains the tasks required to set up the TAXWARE software. These tasks include:
Registering with TAXWARE
Registering with TAXWARE provides the following benefits:
Configuration assistance for TAXWARE components
Monthly updates to tax rates and zip codes
Complete TAXWARE documentation set
You can register online by visiting the TAXWARE web site located at:
http://www.taxware.com.
Configuring TAXWARE
This section contains information on how to configure the TAXWARE nexus for the TAXWARE SALES/USE Tax System.
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Note
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If you do not configure the TAXWARE nexus, all taxes set to use TAXWARE evaluate to zero.
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The TAXWARE nexus is the set of locations from which the seller organizations operate, accept orders, and ship goods. These locations, together with a buyer organization address, determine what tax rate a seller must charge. The TAXWARE nexus requires this information:
States
Cities/counties
Tax setup (state-by-state, all states, or tax exempt)
Type of business
Point of order origin
Ship-from address
TAXWARE software includes a Toolkit to configure your TAXWARE nexus and complete the tax setup. The Toolkit allows you to:
Add and delete sellers from the TAXWARE toolkit software
Maintain files used by the SALES/USE Tax System, including the nexus files and the product code conversion file.
The Toolkit writes files in the directory to which the environment variable TOOLKITOUT points in the system.ini file.
To apply nexus changes made with the Toolkit to your Sales/Use Tax System tax calculations, copy all nexus files from your Toolkit output directory to the SALES/USE Tax System output directory.
For additional information on your TAXWARE software, refer to the TAXWARE documentation included in the BuyerXpert/SellerXpert packaging.
Configuring VERAZIP
The TAXWARE VERAZIP System allows you to configure a number of tax jurisdictions, including state, county, and city levels. You can configure VERAZIP to tax according to individual addresses within a zip code.
BuyerXpert/SellerXpert currently uses the VERAZIP module for tax jurisdictions at the state level. For more information, refer to the TAXWARE documentation.