The Taxtype defines the type of sale being made for tax purposes.  A Taxtype table is set up in the system, and this table is used to assign a valid Taxtype to each customer and shipto address record during customer and shipto creation and editing.  The Taxtype information in each shipto record is carried into the sales orders and invoices that are created using the customer and shipto record.

The Taxtype field is required and a valid Taxtype must be assigned to each customer record and shipto address record.  The Taxtype which is assigned to each customer or shipto is normally based on whether or not the customer has provided a resale certificate for a particular state.  It can also be based on the address that shipments will be sent to (out of the country in the case of export).  The Taxtype assigned to a customer is defaulted into each shipping address for the customer and it can be changed as required, based on the shipto address information.  The Taxtype from the Shipto record is also defaulted into each sales order or invoice line entered using the shipto address. 

The standard Taxtypes delivered with the system are listed in the following table.  Additional Taxtype records can also be set up as required in the Generic Code Table.

Tax Type




Sale to consumers of the product upon which sales tax must charged and collected.



Sales to resellers exempt from the collection of sales tax.  This usually requires that a resale certificate be on record



Sale to an entity outside of the taxing area that requires no sales tax to be collected.  Normally this would be used for shipping goods out of the country.



Non-taxable sales to the Federal Government


Each Taxtype in the system has a field that indicates if the Taxtype is Taxable (Y) or (N).  If the taxtype being used is non-taxable (ie Resale), no tax applies to the address, order or invoice being processed.  If the Taxtype is taxable (ie Retail), the system checks the Taxcode associated with the sale and the Taxable flag in each item being processed to determine if tax should be collected for the order or invoice line.

The system normally defaults a Taxtype of RETAIL  into the new customer and shipto records in the system (so the system will charge tax if required based on the shipping location)  This Taxtype can be changed to RESALE when a resale certificate is received for the address in the customer or shipto record.   The ability of each operator to edit the Taxtype field can be controlled, so that only authorized users are able to edit the field.  This allows new customers to be entered as RETAIL or taxable, and the customer and shipto records can be updated when one or more valid resale certificates are received from the customer.

If you have a customer or shipping address that you make both resale and retail sales to, you would need to set up two different shipto address records for the address.  One would be set up with a RETAIL taxtype and would be used for taxable sales, and one would be set up with RESALE in the Taxtype and this record would be used when the customer buys goods for resale.