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Can or does Acumatica apply tax at an invoice line item level?

  • 9 November 2023
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We have a need to apply tax at a line item level from Projects when an invoice is created, and then add that to the invoice total.

Is that a base functionality of Acumatica Projects or would that require a customization?

I am new to using Projects so I am not sure how line item taxing works with Projects and project billing.

If it is a base function of Acumatica Project and you know how that works, could you explain in some detail how that occurs?

Thank you,

Jeff

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Best answer by StevenRatner 9 November 2023, 17:06

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@jeffgrammer69 -

In Acumatica, tax calculation at the line item level for Projects is indeed a part of the base functionality. When you create an invoice from a project, the tax can be applied to each billing line item based on the tax settings configured in the system. Here's how it generally works:

1. Tax Categories: You would need to set up tax categories in Acumatica. These categories are then assigned to the inventory items or non-stock items that you use in the project transactions.

2. Tax Zones and Rates: You will also set up tax zones and rates which determine the percentage of tax applied. Tax zones can include multiple tax rates for state, county, city, etc.

3. Project Transactions: When you enter transactions in the Project module, you can specify the tax category for each transaction. The tax category determines the tax rate that will be applied.

4. Billing Rules: In Project Billing Settings, you define billing rules. These rules determine how and when the transactions are billed. Ensure that the billing rules are set to include taxes.

5. Generate Invoice: When you generate an invoice from a project, the system pulls in the transactions based on the billing rules. It will calculate the tax for each line item according to its tax category and the associated tax zone of the project or the customer.

6. Review Tax Details: On the generated invoice, you can review the tax details by line item. The system automatically calculates the tax for each line item and adds it to the invoice total.

7. Reporting and Compliance: The tax amounts are reported in the Tax Details and can be used for tax reporting and compliance.

This process is designed to work without customization, provided your tax setup is correct and comprehensive. You should ensure that all the necessary tax categories, zones, and rates are defined in the system, and that each project transaction is associated with the correct tax category.

If you are new to the Projects module, it might be helpful to go through the Acumatica training materials or consult with a colleague or an Acumatica partner who has experience with the Projects module to get a more hands-on walkthrough of the process. The tax setup can be complex depending on your local tax laws and business requirements, so it's important to get it right to ensure accurate invoicing and compliance.

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@jeffgrammer69 you can definitely apply taxes to project line items. you will need to make sure the proper taxes are set up as indicated above by Steve!

from a project perspective, depending on the version you are on, you will need to specify the tax zone (in 2023R1/R2, i know it’s on the addresses tab but if you let me know what version you are on, i could give you more details 

Thanks!

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@jeffgrammer69-

In Acumatica, tax calculation at the line item level for Projects is indeed a part of the base functionality. When you create an invoice from a project, the tax can be applied to each billing line item based on the tax settings configured in the system. Here's how it generally works:

1. Tax Categories: You would need to set up tax categories in Acumatica. These categories are then assigned to the inventory items or non-stock items that you use in the project transactions.

2. Tax Zones and Rates: You will also set up tax zones and rates which determine the percentage of tax applied. Tax zones can include multiple tax rates for state, county, city, etc.

3. Project Transactions: When you enter transactions in the Project module, you can specify the tax category for each transaction. The tax category determines the tax rate that will be applied.

4. Billing Rules: In Project Billing Settings, you define billing rules. These rules determine how and when the transactions are billed. Ensure that the billing rules are set to include taxes.

5. Generate Invoice: When you generate an invoice from a project, the system pulls in the transactions based on the billing rules. It will calculate the tax for each line item according to its tax category and the associated tax zone of the project or the customer.

6. Review Tax Details: On the generated invoice, you can review the tax details by line item. The system automatically calculates the tax for each line item and adds it to the invoice total.

7. Reporting and Compliance: The tax amounts are reported in the Tax Details and can be used for tax reporting and compliance.

This process is designed to work without customization, provided your tax setup is correct and comprehensive. You should ensure that all the necessary tax categories, zones, and rates are defined in the system, and that each project transaction is associated with the correct tax category.

If you are new to the Projects module, it might be helpful to go through the Acumatica training materials or consult with a colleague or an Acumatica partner who has experience with the Projects module to get a more hands-on walkthrough of the process. The tax setup can be complex depending on your local tax laws and business requirements, so it's important to get it right to ensure accurate invoicing and compliance.

 

Thank you Steve!  That was exactly the information I was needing. 
We actually operate and have tax liabilities in every state in the US so our tax setup would need to be inclusive of all of those states where we perform work.

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