Concepts

Settings

Setting up Taxes

You can enter taxes that commonly apply to items that you purchase, and indicate the country, state or province, or locality that has jurisdiction over the tax. Once you enter your taxes, APM can determine which taxes are applicable based on the policies you set on the tax, or you can select the taxes manually for each supplier resource.

Tax Prompting Rules

On each tax, you can select a rule that determines whether or not the tax is added by default to supplier resource prices, purchase order lines, contract prices, and so on. The prompting rules are based on the jurisdiction of the tax. However, a tax will only be prompted when the purchasing site is in the same jurisdiction as the tax, regardless of the prompting setting. For example, Ontario taxes can only ever be prompted for sites that are in Ontario.

When determining which taxes to prompt for a purchase, the system filters the list of taxes by:

1.	Finding all taxes in the same jurisdiction (country, state/province, locality) as the purchasing site.

2.	Examining the prompting rules for the list of taxes gathered in the first step, and removing those which should not be prompted.

For example, an organization has this list of taxes:

•	Canada GST

•	Ontario PST

•	Quebec QST

•	Toronto Tax

The first three taxes have the rule “Prompt if the supplier is in the same country as the purchasing site”. The Toronto Tax has the rule “Prompt if the supplier is in the same locality as the purchasing site”.

A site in Toronto, Ontario creates a price for a supplier that is in Burlington, Ontario. In this case, the Canada GST and Ontario PST are prompted. The QST is not prompted because it’s jurisdiction does not match the purchasing site. The Toronto Tax is not prompted based on the prompting rule (the supplier and site jurisdictions don’t match).

Note: Sales taxes are calculated differently in Quebec than in other provinces. To accommodate this, the PST rate for Quebec must be adjusted. For example, the PST in Ontario is 8%, and it is added to the 5% GST. The PST in Quebec is 7.5% and it is charged on top of the 5% GST.

•	In Ontario the taxes are calculated as follows:

GST = $100 x .05 = $5.00

PST = $100 x .08 = $8.00

Total = $100.00 + 5.00 + 8.00 = $113.00

•	In Quebec the taxes are calculated as follows:

GST = $100 x .05 = $5.00

PST = $105 x .075 = $7.95

Total = $100.00 + 5.00 + 7.95 = $112.95

The PST for Quebec must be entered as a rate of 7.95% (7.5% + (5% x 7.5%)).

To Set up Taxes

1.	From the Site window, select the Administration menu and then Accounting Settings. The Accounting Settings dialog appears.

2.	Select the Taxes tab.

3.	Click New. The Tax Information dialog appears.

4.	On the General tab, enter the following settings:

Setting Name

Description

**Tax name

The name of the tax. You can enter up to 50 characters. For example, the tax name may be Federal sales tax or Gas tax.

**Under authority of

The jurisdiction that enforces the tax: Federal Government, State/Provincial government, or Local Government.

**Country

The country where this tax is applicable. Select the country from the list. You need to select a country when the tax falls under the jurisdiction of a federal government.

State / province

The state or province that requires this tax. Select the appropriate state or province from the list. You need to select a state or province when the tax falls under the jurisdiction of a state or local government.

Tax locality

The locality where this tax is applicable. Select the appropriate locality from the list. You need to select a locality when the tax falls under the jurisdiction of a local government.

5.	To enter a tax rate, click New. The Tax Rate dialog appears.

6.	Enter the tax rate settings:

Setting Name

Description

**Description

This box shows a name or short description of the tax rate. You can enter up to 50 characters.

Tax type

The type of the tax: Percentage or Per-unit. Percent: The tax is calculated as a percentage charged on the total cost of the purchase. Per-Unit amount: The tax is a flat rate charged on each unit of the item.

Note	Enter any comments about this tax rate, such as specific items that are included or excluded.

The tax is recoverable

Select this option if the cost of this tax is recoverable. Recoverable taxes cannot be included in the loaded cost of a resource and are excluded from the estimated total cost on purchase requirements. APM uses the estimated total cost when selecting a preferred supplier for a purchase demand.

Include in loaded cost

Select this option to determine whether or not this tax rate is included in the calculation of the loaded cost of items. If the tax is not to be included in the loaded cost, the cost of the tax is charged to a separate account. Select an appropriate GL account to charge.

7.	Click OK to save the tax rate and return to the Tax Information dialog.

8.	If there are multiple tax rates within one tax, repeat steps 5 to 7 to enter all the tax rates.

9.	Select the Default rate to use for this tax.

10.	On the Policies tab, enter tPolicies tab

Setting Name

Description

Materials and tools

Select this option if the tax applies to purchases of material and tool resources. The tax can then be prompted on new material or tool supplier resources.

Services and contractors

Select this option if the tax applies to purchases of service or contractor resources. The tax can then be prompted on new service or contractor supplier resources.

Repair orders

Select this option if the tax applies to repair orders. The tax can then be prompted on new repair supplier resources.

Equipment rentals

Select this option if the tax applies to equipment rentals. The tax can then be prompted on new supplier resources for equipment rentals.

Collection policy

Select which suppliers are eligible to collect this tax: • Collected only by suppliers in the same locality as the purchasing site • Collected only by suppliers in the same state or province as the purchasing site • Collected only by suppliers in the same country as the purchasing site • Collected by suppliers in any country Only the options that are applicable to the tax can be selected. For example, if the tax is created as a country tax, only the Same country, and Any country options are available.

Prompting policy

Select if or when the system should prompt this tax when new supplier resources or extra charges are created: • Prompt if the supplier is in the same locality as the purchasing site • Prompt if the supplier is in the same state or province as the purchasing site • Prompt if the supplier is in the same country as the purchasing site • Prompt on all supplier resources and extra charges Note: The Prompt on all option is only available if the collection policy is Collected by suppliers in any country. • Never prompted: The tax must be added manually to any supplier resources or extra charges to which it applies. Only the options that are applicable to the tax can be selected. For example, if the tax is created as a country tax, only the Same country, Prompt on all, and Never prompted options are available. Note: A tax will only be prompted on a supplier resource price when the price’s site is in the same jurisdiction as the tax, regardless of the prompting setting. For example, Ontario taxes can only ever be prompted for sites that are in Ontario.

11.	On the Options tab, enter the following settings:

Setting Name

Description

Remittance Rule

Select whether this tax is self-assessed or remitted to the ordering supplier: • Always remitted to the ordering supplier: Select this option if the tax is always paid directly to the ordering or invoicing supplier. The tax is never self-remitted. • May be remitted to the ordering supplier, or is self-assessed: If you select this option, users can determine at the time of purchase if the tax will be remitted or not. You may use this option if some suppliers remit the tax, but others do not. You must also select a tax accrual account for this tax. • Always self-assessed: Select this option if the tax is always self-assessed, and it is never paid to the ordering supplier. You must also select a tax accrual account for this tax.

Sort sequence

The sort sequence for this tax. If more than one tax applies to a purchase, the sort sequence determines the order in which they appear on the purchase order.

12.	On the Invoicing tab, enter the following settings:

Setting Name

Description

Invoice price tolerances

Select whether this tax uses the site’s price tolerance rules for invoicing or if specific price tolerances are required for this tax. To set up price tolerances specific to this tax, select the option Use the tax specific rules entered below and then enter the appropriate tolerances for price increases and/or decreases. If the tax invoice line is outside of the tolerances, the invoice line will require approval.

Discountable amount

Select whether or not the value of this tax should be included in the amount that is eligible for a supplier’s discount. Example: A supplier issues an invoice for $850; the payment terms are 1% Net 10. The invoice consists of material costs of $800 and tax of $50. If the tax is not included in the discountable amount, the amount eligible for a discount is $800, and the discount is therefore $8. If the tax is set to be discountable, the amount eligible for a discount is $850, and the discount is therefore $8.50.

13.	When you are finished, click OK to close the Tax Information dialog.

14.	Repeat steps 3 to 13 for each tax that you need to enter.

You can now select the site’s locality and default taxes. See Selecting a Locality and Default Taxes for a Site.