Applying Sales Tax to Discount Items (U.S. and Canada)

To apply sales tax to discount items, do the following:

1. Understand the discount methods that can be applied to the items. For more information, see Discount Methods (U.S. and Canada).

2. Review the Calculation Logic for Sales Tax on Discount Items to help you understand how the choice of discount methods can affect the tax charged for a sales order or invoice.

3. Choose to apply the discount before or after sales tax has been added to the items. By default, discounts are applied after sales tax. See Applying a Discount After Sales Tax. To apply a discount before sales tax, see Applying a Discount Before Sales Tax.

Related Topics

Tax Accounting Overview

Applying Sales Tax or VAT to Discount Items

Discount Methods (U.S. and Canada)

Discount Methods (VAT Nexuses)

Applying VAT Before or After Discounts

General Notices