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How to set up sales tax for Clothing in New York State

  • 2 February 2024
  • 2 replies
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I am struggling with setting up a client selling clothing in New York state and using native Acumatica tax for the Sales tax

The issue is clothing items in New York state are exempt from NY state sales tax for items under $110.  Clothing is then subject to a country clothing surtax (which can be different than the county tax) and several counties waive the tax under $110.

My issue is when a sale is for example 200 tee shirts at $10.  I can only assign a tax category to the inventory item.  I have set up Tax ids for NYExempt and then each county/clothing tax.  The tax ids are set up as exclusive line level.  I have set up tax zones by county/cloth and assigned the specific county/cloth and NYexempt tax id to it.

When I invoice the 200 tee shirts, it only exempts $109 as it looks at the line item as a whole due to tax category being assigned instead of tax id.

Also, when I have multiple lines for clothing, it is treating it as document exclusive and only exempting 109 instead of the lines by dollars.

The client also has taxable sales, exempt, and the freight on a clothing order is fully taxable at the full New York state and county rate.  

I have set up the reporting to match the New York state sales tax reporting lines.

I do not see how to get the tax set up to capture the clothing set up.  I appreciate all and any suggestions or ideas.

Thank you!!

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Best answer by bryanb39 23 February 2024, 22:44

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I entered this as a case with Acumatica and the recommendation was to have the client use Avalara or Vertex to handle this.  The only way to use Acumatica tax for this would be to enter the sales orders in with lines that were $109 dollars or less, which is very cumbersome for the client.  Also support felt that maintaining tax rates for both the county sales tax and county clothing sales tax would be a lot of maintenance as well.

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I’d recommend creating a TaxID for Exempt Clothing with a 0% rate
Then create a Tax Category for exempt clothing items and apply it to your clothing items under $110 each. 
Link it to the same zone and appropriate group.

This assumes the item is always under $110.  In situations where you have items that can be above or below $110 depending on who you are selling it to:

Option 1:  Create a Non-Stock version that is a kit containing that product. The Non-Stock version can be for above or below $110.  

Option 2:  A Business event that changes the Tax Category on the Sales Order Line when there are line items of this clothing category is Above $110.  Have it change the tax Category to be Taxable. You can also manually change the tax category on a line. I’d recommend a Business Event as a backup in case someone misses it.  



 

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