Understanding the Tax Process for Stock and Nonstock Items

Vertex Sales Tax Q Series processes taxes for these items:

• Stock items. Typically, these items are products that need to have records in the Item Master (F4101) and Item Branch File (F4102) tables.

• Nonstock items. These items are not required to have records in the F4101 and F4102 tables; however, they can exist on an order and have taxes assigned to them.

For both stock and non-stock items, Sales Tax Q Series searches for a value in the Product Category and Transaction Type fields to be used by the Tax Decision Maker (TDM).

For stock items, the value in the Product Category/ID field is typically derived from the category code on the item branch/plant record. The category code that is used depends on what is set up in the Vertex Q Series constants. The transaction type is usually derived from the system code of the order. For the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Procurement systems, the transaction type is PURCH, and for the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Sales Order Management systems, the transaction type is SALE.

For nonstock items, you can specify a Vertex Sales Tax Q Series product category and transaction type for an order type and line type combination. The Vertex Sales Tax Q Series product category is used for product exceptions in TDM. The Vertex Sales Tax Q Series transaction type specifies the type of transaction, such as sales, purchase, rental, or service, so that Vertex Sales Tax Q Series can apply the appropriate tax.

For non-stock order lines such as freight or lease charges, use the Non-Stock Product Categories program (P7307) to specify the product category and transaction type.