Shipping Item Included in Tax Computation When Creating Sales Order

When creating Sales Orders, the Amount for Shipping Item is included in the computation for the Tax Amount. Check the account setup to verify Tax Code used for Shipping Items.

Solution

Sequence used to verify the Tax Code used for Shipping Items.

I. Customer record

1. View Customer record
2. Click Financial tab
3. Tax Information: Verify Tax Item
4. Note: If Tax Item is null, see next step.

II. Shipping Item record

1. Go to Lists > Accounting > Shipping Items
2. Edit the Shipping Item used in the Sales Order
3. Click Shipping Rules tab
4. Charge Tax on This Shipping Portion Of Item: Verify the Tax Schedule selected
5. Go to Setup > Accounting > Tax Schedules
6. Note: If Tax Schedule is null, see C.
7. Click on the Tax Schedule
8. Verify the Sales Tax Code selected

III. Set Up Taxes page

1. Go to Setup > Accounting > Set Up Taxes
2. Click the Country of the Sales Order
3. Default Tax Code: Verify Default Tax Code