We have a client who is a “construction” company which also does manufacturing. Since the materials they purchase ulitmately is applied to a project, they are required to pay sales taxes on their raw materials. Ideally, we’d like the PO and AP bill to calculate the sales taxes on the purchased goods (configured for Sales Tax Input), but would like the system to treat the sales tax as a landed cost to increase the value of the inventory.
It seems like there are two mutually exclusive paths here:
- Configure the system to calculate the expected sales taxes on the PO and AP Bill by assigning tax categories to the stock items, tax zones to the vendor locations, and setting up the Sales Tax Rates with an input line.
- Do not configure the system to calculate the expected sales taxes, but rather enter the vendor’s taxes as a Landed Cost Accrual transaction to adjust the value of the received inventory, then add the LC accrual to the vendor’s invoice.
I suppose that if we’re using line-level tax calculation, we could create a business event/import workflow to generate inventory adjustments after release, but am wondering if there isn’t a cleaner, more systematic way to apply calculated taxes as landed costs to the received inventory. I feel that unless the GI used for updating the inventory costs would need to be carefully crafted to avoid double-booking of inventory adjustments.
Who else has dealt with this?