Below is a brief explanation of the various ways to charge tax through INVENTORY.

The "Inventory Entry" "Taxable Indicator" (5.1.1 field 5) affects the way certain part numbers are taxed. If the "Taxable Indicator" is blank, the system will default to the Customer tax information in "Customer Entry" in ACCOUNTS RECEIVABLE (6.1.1 fields 19 & 20).

Taxable

The Inventory marked as Taxable (5.1.1 field 5) will tax all Customers except those listed as "NT" in "Customer Entry" in ACCOUNTS RECEIVABLE( 6.1.1 field 19).

Inventory Entry (5.1.1)

1. If the Tax Indicator of the Part Number is <Y>, tax will be calculated on this item for all Customers, except those Customers setup as <NT> in the Tax Code field in “Customer Entry” in Accounts Receivable (6.1.1 field 19).
2. The Extra Tax in “Tax Code Entry” in ACCOUNTS RECEIVABLE (6.1.7.1 field 4) only affects the items with a Tax Indicator of <Y>.

Not Taxed

The Inventory marked as Never Taxed will not tax any Customer.

Inventory Entry (5.1.1)

1. Part numbers are never taxed, on anyone, if the "Taxable Indicator" is "N". An example would be Labor.