4 - Tax

Tax Expl Code 1

The user-defined code (OO/EX) that the system uses to calculate tax and G/L distribution amounts. The system uses the tax explanation code in conjunction with the tax rate area and tax rules to determine how the tax is calculated. Each transaction pay item can be defined with a different tax explanation code.

Tax Rate/Area

A code that identifies a tax area or a geographic area that has common tax rates and tax authorities. The system validates the code you enter against the Tax Areas table (F4008). The system uses the tax rate area in conjunction with the tax explanation code and tax rules to calculate tax and G/L distribution amounts when you create an invoice or voucher.

Note: You must use tax explanation code E for tax exemption in the sales overage application.