Understanding JD Edwards EnterpriseOne Tax Calculation Components

The interface between JD Edwards EnterpriseOne and Vertex Sales Tax Q Series is used to transfer selected JD Edwards EnterpriseOne components to Vertex Sales Tax Q Series and then return tax information to the JD Edwards EnterpriseOne systems.

The standard JD Edwards EnterpriseOne tax calculation components that are used with Vertex Sales Tax Q Series are described in this table:

Component	Description
Tax authorities	You use tax authorities in the JD Edwards EnterpriseOne software to define the government agencies that assess and collect taxes. You define tax authorities in the JD Edwards EnterpriseOne tax processing system only for international tax authorities. The U.S. and Canada tax authorities are stored in Vertex Sales Tax Q Series.
Tax rate/area	For U.S. and Canadian taxes, you specify a GeoCode for each tax rate/area so that the Vertex Sales Tax Q Series system can determine the correct taxing jurisdictions. Vertex, Inc. compiles the data that makes up the GeoCode, using state, city, zip code, and county, and maintains the tax rates associated with each.
Automatic accounting instructions (AAIs)	For U.S. and Canadian taxes, you use these AAI items: PTxxxx for the JD Edwards EnterpriseOne Accounts Payable system. RTxxxx for the JD Edwards EnterpriseOne Accounts Receivable, Contract Billing, and JD Edwards EnterpriseOne Service Billing systems. 4250 for the JD Edwards EnterpriseOne Sales Order Management and JD Edwards EnterpriseOne Service Management systems. 4350 for the JD Edwards EnterpriseOne Procurement system. For non-U.S. and non-Canadian taxes, you assign an AAI to each taxing authority within each tax rate/area.
Tax rules by company	You can define tax rules for the JD Edwards EnterpriseOne Accounts Receivable (JD Edwards EnterpriseOne Sales Order Management), JD Edwards EnterpriseOne Accounts Payable (JD Edwards EnterpriseOne Procurement), and JD Edwards EnterpriseOne General Accounting systems. When you enter transactions for these systems, taxes are calculated according to the tax rules. Tax rules: Calculate discounts on a gross amount that already includes tax. Calculate tax on a gross amount that includes the discount amount. The tax rules apply to taxes for all countries.
Tax explanation codes	Tax explanation codes control how a tax is assessed and how it is distributed to the general ledger revenue and expense accounts. JD Edwards EnterpriseOne software provides a number of tax explanation codes. Because tax explanation codes are user-defined codes (UDC table 00/EX), you can set up additional codes for the specific business needs. The Sales Tax Q Series interface recognizes only tax codes E, S, and U: E (exempt) - used by all systems that use Vertex Sales Tax Q Series. You can use the tax explanation code to make a customer or a specific transaction tax exempt. For example, a customer with a tax explanation code E is exempt. To make a specific transaction exempt, you can use this code for purchase orders, sales orders, accounts receivable invoices, service management invoices, and contract billing and service billing invoices. Currently, service order routings for the JD Edwards EnterpriseOne Service Management system are taxable and cannot be overridden with E. Vertex recommends you use the Tax Decision Maker (TDM) to make the customer exempt. S (sales) - used by the JD Edwards EnterpriseOne Sales Order Management, JD Edwards EnterpriseOne Procurement, JD Edwards EnterpriseOne Accounts Receivable, JD Edwards EnterpriseOne Accounts Payable, JD Edwards EnterpriseOne Service Management, JD Edwards EnterpriseOne Contract Billing, and JD Edwards EnterpriseOne Service Billing systems. JD Edwards EnterpriseOne Procurement and JD Edwards EnterpriseOne Accounts Payable transactions with a tax explanation code of S are not written to the Vertex register. U (use) - used by the JD Edwards EnterpriseOne Procurement, JD Edwards EnterpriseOne Accounts Payable, and JD Edwards EnterpriseOne Service Management systems.