Tax jurisdictions define taxing locations for sales tax purposes. A tax jurisdiction is a geographical area (location) where taxes are assessed based on the jurisdiction’s tax rate.
Jurisdictions are defined and maintained in Sales Tax Jurisdiction Maintenance. The sales tax rates that you associate with a jurisdiction are defined and maintained in Sales Tax Rate Maintenance.
Tax jurisdictions can be used to assign the following taxes:
State
County
City/Township
Postal Code
Special
Jurisdictions can be considered sales tax jurisdictions (tax jurisdictions) or filing jurisdictions. A tax jurisdiction is the jurisdiction where sales tax (tax) is assessed, and a filing jurisdiction is where taxes are actually filed. However, sales tax jurisdictions are only used and required for the internal tax functionality.
NOTE If the system is integrated with AvaTax, do not set up any sales tax jurisdictions.
When creating a customer in Customer Maintenance, on the Ship-To tab, the Tax Jurisdiction field is a required field. This identifies the sales tax jurisdiction in which the customer ship-to address is located.
To link several jurisdictions together (example, State-Count-City), the system uses a parent jurisdiction field. There can be numerous sales tax categories per jurisdiction.
When a window contains a Tax Jurisdiction field, it can be populated with a valid jurisdiction using the Lookup button in the Lookup window. In the Lookup window, double-click a tax jurisdiction to populate the field.
Note A customer ship-to address can only have one sales tax jurisdiction or be assigned a tax-exempt status (requiring a state tax exemption number).
For more information, see Customer Sales Tax Setup.