Using Tax Product Groups

Set up charge code and product tax groups to take advantage of exception processing in the third-party tax supplier system. These tax groups must be defined in the tax supplier system. You can create or update charge codes and products with the applicable tax groups. In PeopleSoft Billing, the system populates the default charge code tax group on a bill during bill entry, and the system passes that value to the tax supplier during tax calculation.

PeopleSoft correlates the tax group to a different entity in each of the supported tax solutions.

Tax Solution	Tax group equivalent
Vertex Q Series	Product Category
Vertex O Series	Product Class
Taxware Sales and Use Tax	Product Code
Taxware Enterprise	Not used. In Order Management, the product code corresponds to the Taxware Enterprise goods/services code. In Billing, the identifier corresponds to the Taxware Enterprise goods/services code.

If you use Taxware Sales and Use Tax system, you can

• Create tax groups equivalent to the product codes supplied by Taxware that apply to your business.

• Map the tax groups defined in PeopleSoft to Taxware product codes within Taxware.

• Use the Taxware STEP system to set up tax exceptions for tax groups defined in PeopleSoft that are not equivalent to Taxware product codes.

If you use Vertex, you can set up tax exceptions for product categories or classes and product IDs. The product categories or classes defined in Vertex should also be defined as tax groups in PeopleSoft. You may need to add the products defined in PeopleSoft as Vertex product IDs, if you define tax exceptions by product IDs. If necessary, map the product categories and product IDs defined in Vertex Q Series to product categories and subcategories defined in Vertex Q Series Taxability Mapping Tool (TMT).

Tax Product Groups in PeopleSoft Order Management

The sales order line and schedule designate a product ID. You can associate a tax product group with the product. PeopleSoft Order Management sends the product ID and the tax product group to the third-party tax supplier system, which determines what takes precedence when retrieving the appropriate tax rate used in tax calculation.

Tax Product Groups in PeopleSoft Billing

The bill line contains two product-related fields: the Identifier field and the Tax Group field. The system passes both fields to the third-party tax supplier system. When you enter a line during bill entry, the default tax group on the line appears from the tax group associated with the charge code used as the identifier.