This section describes the basic logic and differences between POS and non-POS transactions as far as sales tax.
Point of Sale
When you process a Point of Sale transaction, you are selling “over the counter”, from the physical location where the POS terminal is located. This means the Taxcode (geographic tax district) used for each POS transaction should always be the taxcode for the POS location itself.
What determines if a POS sale is taxable or not is based on a few factors.
Whether or not the customer has a valid resale cert for the state where the POS transaction state (this can be a MO resale cert, or one that is accepted by MO – some states will accept resale cert from another state).
When you are doing pos and need to skip charging tax, the logic is that you change the taxtype from RETAIL or taxable to RESALE (nontaxable). When you do this, the system should prompt you to either select or enter and select a valid tax cert for the customer (which can be cash sales or a net customer). If you enter the tax #, and the state in the record matches MO (or another state that MO will accept from), the pos program will change the taxtype to RESALE and skip the tax.
When you do the sls tax report later, the non taxable sales should show as MO sale (based on the state you delivered in), RESALE taxtype (based on changing field and fact you have resale cert), and MO taxcode (based on where you deliver the goods). No tax is charged because of the resale tax type.
Shipping items to customer
If you are shipping items to the customer vs them picking up, you need to process the order as a normal sales order and then invoice it using order completion – not POS. The basic reason for that is that the logic for the sales tax is different.
In pos logic is that the resale cert or lack of it determines if you charge tax (taxtype changes, taxcode is always MO because that is where goods are delivered).
On a shipment being sent out to customer, logic is that taxable status can be based on either taxtype or taxcode
The sale can be nontaxable because you have a resale cert for the customer ship to state being shipped to, or it can be nontaxable because you are shipping into a state where you don’t have req to collect tax).
In first example, you could have a RESALE MOTAXCODE (similar to POS) – we have a resale cert for state being shipped to so don’t charge tax even if order points to taxcode that has a rate in it.
In second example, you could have customer who is RETAIL NO TAX (no resale cert in place for state being shipped to, but also no req to collect tax in that state so the taxcode rate is 0 – like no tax).
We normally have rates in the taxcodes for the states you collect in, and point the other states (zip codes) to NO TAX taxcode which has a zero rate.
The combination of the TAXTYPE (Y OR N flag for taxable), ITEM TAX FLAG (Y or N for taxable) and the TAXCODE (taxrate) is what determines if you get tax or not. A N in the taxtype, or the item flag or a 0 in the taxcode will all result in no tax being charged.