I am evaluating ERPNext for my customers in the US, and running into an issue with Sales Tax.
(1) A Sales Taxes and Charges Template gets assigned to a sales order. Where does that come from?
(2) The US has a ridiculous number of possible tax jurisdictions and therefore rates (states, counties within states, and sometimes cities within counties). The usual ERP configuration for this is to mark items as either taxable or not (or sometimes a few other things like food being taxed at a lower rate), and then create geography based tax schedules (templates) that are then assigned to customer shipping addresses.
Is there a way to configure this in ERPNext?
(3) Has anyone done an integration with something like TaxJar or Avalara that automates the sales tax process?
TIA
Phil
Make Tax Rule on pin code base. As US tax based mainly on pin code.
By pin/zip/postal code is close but not really accurate. I used to live in a zip code that actually had pieces of 4 counties in it.
Ohhh by that permutation and combination on Tax rules you have to make lots of Tax rules.
Better to use TaxJar
How do I mark the items as taxable or nontaxable without specifying a particular rate?
Simply Integrated item with Tax without Rate specific, there is not any selection or non selection of items tax in erpnext
Is this the only check which is required? Non-taxable or zero tax-rated or exempted?
Taxable vs nontaxable would cover most situations - for 100% coverage it would need to allow for a few more choices - the most common example is groceries only having a 2% rate while the general tax rate is 6%. Avalara (and likely TaxJar) have many codes to mark items in a way that they can code to handle all 50 states quirks.
How does the system decide which tax rule to apply?
There is a generic US rule and I created a NC rule marked for ShiptoState = NC. When I create a customer with a NC address, it gets the generic US rule and not the NC specific rule.
Hi @philmcintosh,
In the Tax Jar integration that I worked on (a branch of the DigiThinkIT app) I was able to use item tax categories to correctly charge the rate. I haven’t studied the Frappe’s implementation but it wasn’t a lot of code to add it.
Update:
This implementation does not use the tax code for items, only if they are exempt or not.