E.2.1.2 Origination

This topic provides information on the lease origination process.

The Origination tab of Tax screen facilitates to capture details for upfront tax calculation during Origination which is based on Purchase Price, Itemization/Lease Payment amount, and Total of Lease Payments.
  1. On the Setup, click Administration. Under Administration, click System.
  2. Under System, click Tax. Under Tax, click Lease. Under Lease, click Origination.

    The Origination screen displays.

    Figure E-2 Origination


    Description of Figure E-2 follows
    Description of "Figure E-2 Origination"

  3. In the Formula Details section, click Add. User can also perform any of the Basic Operations mentioned in Navigation chapter. A brief description of the fields are given below:

    Table E-4 Formula Details

    Field Description
    Calc Method
    Select the lease tax calculation method as one of the following from the drop-down list. The list is populated based on SALES_TAX_INT_AMT_CD lookup code for Internal calculation method and SALES_TAX_EXT_AMT_CD lookup code for Vertex.
    • Lease Payment Amount: fixed tax on lease installment amount
    • Total of Lease Payment: fixed tax on total lease amount
    • Flat Itemization: fixed tax amount charged for configured itemizations
    • Percentage of Itemization Amount: fixed tax percentage charged for configured itemizations
    • Purchase Price Amount: fixed tax on purchase price of asset retail valuation.

    Refer to example Illustration - Upfront Tax Calculation below for information on calculation methods.

    Itemization

    Select the required itemization from the drop-down list. User can define multiple itemization for the selected calculation method to determine tax.

    Note: This field is available only if the calculation method is either FLAT ITEMIZATION AMOUNT or PERCENTAGE OF ITEMIZATION AMOUNT.

    Sign

    Select +ve option (default) if the calculated tax amount is to be added to the lease application or -ve option if a tax rebate is given on the lease application.

    Note: This field is displayed only for Internal tax calculation method.

    Value

    Based on the calculation method selected, specify either amount or percentage of tax to be calculated.

    Note: This field is displayed only for Internal tax calculation method.

    Tax Exemption

    Check this box to indicate if the tax formula can be exempted from tax calculation for lease applications having valid exemption details. Else, tax is assessed for lease application using this tax formula.

    Note: This check box is displayed only for Internal tax calculation method.

    Enabled Check this box to enable the tax formula.
  4. Perform any of the Basic Actions mentioned in Preface.

Illustration - Upfront Tax Calculation

The table below is an illustration on how upfront tax is determined for different calculation methods:

Table E-5 Upfront tax calculation

Payment Amt Total Amt MSRP Item Amt Calc Method Tax % Tax Amt Payment Amt Total Amt
$558.17 $20,093.72 $20,000 $20,000 Purchase Price 5% NA $558.17 $21,093. 72
$558.17 $20,093.72 $20,000 $20,000 Percent of Itm Amt 5% NA $558.17 $21,093. 72
$558.17 $20,093.72 $20,000 $20,000 Flat of Itm Amt - $1,000 $558.17 $21,093. 72
$558.17 $20,093.72 $20,000 $20,000 Lease Payment Amt 5% NA $586.08 $21098.8 3
$558.17 $20,093.72 $20,000 $20,000 Total of Lease Payment Amt 5% NA $558.17 $21098.4 1

Parent topic: Sales Tax Setup