How can we handle tax when there is a Service Contract with Service Items located in multiple states? (and of course a taxable customer)
The invoices that BC creates to bill against a service contract, are for all Service Items on the Contract. But if the customer is taxable, and some of those Service Items are in different states--or even different counties--then the tax on the invoice is going to be wrong.
That is an ugly issue. You have a customer, say being invoiced in New York, but have specific serviceable items in PA, OH, and TX. This changes the entire Service Contract taxability crossing multi-state lines. The only solution I can think of is on the Service Item itself. Under each Service Item, setup the Ship-to Code to the specific Tax Area Code designation and whether Tax Liable. This should allow for each Item to denote Taxable and Non-Taxable under the entire Service Contract. I have not had time to test this but as with Sales Tax on Sales Order, the Ship-to address defines the Taxing State/Jurisdiction. Try this out and if I have time this weekend I will as well.
Thank you for helping me think through this one, Steve.
It seems to me that as soon as you start having multiple Service Items on a document, they must have the same "Ship-To" Address, because that's how tax gets calculated.
Where this becomes the biggest issue for us is on the system-generated "Service Contract Invoices". This is where we bill the customer their monthly/quarterly/annual bill for the contract. NAV creates a single invoice for the contract, with 1 GL line for each Service Item on the Contract. When each of those service items are located at unique addresses--and those addresses have different tax rates--It doesn't work. :(
Yes, this is the big unknown, as I have not tested the theory/process, but it was a idea to look into. Given the limitation I would say that working with your Partner to write-up a customization would solve the issue, if you want to stick with a single Service Contract Invoice, with multiple Service Lines both taxable and non-taxable.
If you need help explaining to your Partner, I am available to help you.
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