## Setting Up the Interface to Vertex Sales Tax Q Series

This chapter provides overviews of the interface to Vertex Sales Tax Q Series with the JD Edwards EnterpriseOne systems, JD Edwards EnterpriseOne tax calculation components, databases used by Vertex Sales Tax Q Series, and discusses how to:

- Set up Vertex Sales Tax Q Series.

- Set up automatic accounting instructions (AAIs) for Vertex Sales Tax Q Series.

- Set up user-defined codes (UDCs) for Vertex Sales Tax Q Series.

- Process taxes for stock and non-stock items.

- Define tax information for items.

- Assign GeoCodes to address book records.

- Assign GeoCodes globally.

- Assign GeoCodes manually.

- Override GeoCodes.

- Process Vertex Sales Tax Q Series tax information.

- Print tax information.

### Understanding the Interface to Vertex Sales Tax Q Series

Vertex Sales Tax Q Series is a product of Vertex, Inc. It provides a means to calculate sales and use tax based on the zip code, city, county, and state of a customer or supplier.

You can use Vertex Sales Tax Q Series with these JD Edwards EnterpriseOne systems:

- JD Edwards EnterpriseOne Accounts Receivable

- JD Edwards EnterpriseOne Accounts Payable

- JD Edwards EnterpriseOne Sales Order Management

- JD Edwards EnterpriseOne Procurement

- JD Edwards EnterpriseOne Service Management

- JD Edwards EnterpriseOne Contract Billing

- JD Edwards EnterpriseOne Service Billing

  Important! If you use the JD Edwards EnterpriseOne Payroll system, you are required to use the Vertex Payroll Tax Q Series system.

Vertex Sales Tax Q Series:

- Reduces the setup required for multiple tax rate/areas.

- Reduces processing time and rate maintenance.

- Creates tax compliant records.

- Allows exceptions and overrides to the default tax rates.

Vertex Sales Tax Q Series is integrated with the JD Edwards EnterpriseOne software, which means that you can perform tax calculations automatically using Vertex Sales Tax Q Series, the JD Edwards EnterpriseOne Tax Rate/Areas program (P4008), or both. The JD Edwards EnterpriseOne system writes and supports the software interface between JD Edwards EnterpriseOne and Vertex Sales Tax Q Series.

For specialized exemption conditions or the automatic update of tax rate changes, you must use the Tax Decision Maker. The Tax Decision Maker enables you to record exceptions to the standard rates. When tax laws and rates change, the new requirements for each tax authority are distributed in monthly updates to the tax rate tables used by the Vertex Tax Decision Maker so that you can apply taxes correctly.

Vertex Sales Tax Q Series calculates tax based on the standard rates and rules for the United States and Canada and its territories and possessions. To perform all other foreign tax calculations, you have two options:

- Use the JD Edwards EnterpriseOne Tax Rate/Areas program. The Tax Rate/Areas program processes transactions using Vertex Sales Tax Q Series if a GeoCode is in the Tax Rate/Area field (TXA1). If no GeoCode is in the field, the Tax Rate/Areas program uses standard JD Edwards EnterpriseOne taxing.

- Use the Vertex Sales Tax Q Series system, but maintain tax rates manually for foreign locations using the Tax Decision Maker (TDM).

In addition to Vertex Sales Tax Q Series, you can also purchase a Returns module, which completes the sales tax cycle by automating the preparation of state and local tax returns. If you plan to use the Vertex Sales Tax Returns Q Series module, ensure that you install it after you perform all of the Vertex Sales Tax Q Series setup tasks.

See Setting Up Tax Information.

### Understanding JD Edwards EnterpriseOne Tax Calculation Components

The interface between JD Edwards EnterpriseOne and Vertex Sales Tax Q Series is used to transfer selected JD Edwards EnterpriseOne components to Vertex Sales Tax Q Series and then return tax information to the JD Edwards EnterpriseOne systems.

The standard JD Edwards EnterpriseOne tax calculation components that are used with Vertex Sales Tax Q Series are described in this table:

Component | Description
Tax authorities | You use tax authorities in the JD Edwards EnterpriseOne software to define the government agencies that assess and collect taxes. You define tax authorities in the JD Edwards EnterpriseOne tax processing system only for international tax authorities. The U.S. and Canada tax authorities are stored in Vertex Sales Tax Q Series.
Tax rate/area | For U.S. and Canadian taxes, you specify a GeoCode for each tax rate/area so that the Vertex Sales Tax Q Series system can determine the correct taxing jurisdictions. Vertex, Inc. compiles the data that makes up the GeoCode, using state, city, zip code, and county, and maintains the tax rates associated with each.
Automatic accounting instructions (AAIs) | For U.S. and Canadian taxes, you use these AAI items: PTxxxx for the JD Edwards EnterpriseOne Accounts Payable system. RTxxxx for the JD Edwards EnterpriseOne Accounts Receivable, Contract Billing, and JD Edwards EnterpriseOne Service Billing systems. 4250 for the JD Edwards EnterpriseOne Sales Order Management and JD Edwards EnterpriseOne Service Management systems. 4350 for the JD Edwards EnterpriseOne Procurement system. For non-U.S. and non-Canadian taxes, you assign an AAI to each taxing authority within each tax rate/area.
Tax rules by company | You can define tax rules for the JD Edwards EnterpriseOne Accounts Receivable (JD Edwards EnterpriseOne Sales Order Management), JD Edwards EnterpriseOne Accounts Payable (JD Edwards EnterpriseOne Procurement), and JD Edwards EnterpriseOne General Accounting systems. When you enter transactions for these systems, taxes are calculated according to the tax rules. Tax rules: Calculate discounts on a gross amount that already includes tax. Calculate tax on a gross amount that includes the discount amount. The tax rules apply to taxes for all countries.
Tax explanation codes | Tax explanation codes control how a tax is assessed and how it is distributed to the general ledger revenue and expense accounts. JD Edwards EnterpriseOne software provides a number of tax explanation codes. Because tax explanation codes are user-defined codes (UDC table 00/EX), you can set up additional codes for the specific business needs. The Sales Tax Q Series interface recognizes only tax codes E, S, and U: E (exempt) - used by all systems that use Vertex Sales Tax Q Series. You can use the tax explanation code to make a customer or a specific transaction tax exempt. For example, a customer with a tax explanation code E is exempt. To make a specific transaction exempt, you can use this code for purchase orders, sales orders, accounts receivable invoices, service management invoices, and contract billing and service billing invoices. Currently, service order routings for the JD Edwards EnterpriseOne Service Management system are taxable and cannot be overridden with E. Vertex recommends you use the Tax Decision Maker (TDM) to make the customer exempt. S (sales) - used by the JD Edwards EnterpriseOne Sales Order Management, JD Edwards EnterpriseOne Procurement, JD Edwards EnterpriseOne Accounts Receivable, JD Edwards EnterpriseOne Accounts Payable, JD Edwards EnterpriseOne Service Management, JD Edwards EnterpriseOne Contract Billing, and JD Edwards EnterpriseOne Service Billing systems. JD Edwards EnterpriseOne Procurement and JD Edwards EnterpriseOne Accounts Payable transactions with a tax explanation code of S are not written to the Vertex register. U (use) - used by the JD Edwards EnterpriseOne Procurement, JD Edwards EnterpriseOne Accounts Payable, and JD Edwards EnterpriseOne Service Management systems.

Tax Considerations

Before you set up the Vertex Sales Tax Q Series constants, which includes activating the interface between JD Edwards EnterpriseOne and Vertex Sales Tax Q Series, carefully consider the specific conditions and requirements of the company, product, customer, and supplier, and the international tax obligations. This table includes tax considerations that could impact the company:

Tax Consideration | Explanation
Company and Division | You should understand any special dispensations that the company has arranged with state or local jurisdictions for collecting sales and use taxes at a reduced rate. Then consider whether tax returns are filed for one company or for multiple companies.
Product | You should understand the business and how products fit into appropriate tax categories. For example, rebuilt machinery might be taxed differently than spare parts for the same machinery. Decide how you will set up the taxing policies for JD Edwards EnterpriseOne and Vertex Sales Tax Q Series.
Customer and Supplier | You must properly identify the tax category to which customers and suppliers belong. For example, a customer might be a provider of goods or services, a reseller, a charitable organization, or other tax group. Decide how you will set up customers and suppliers in JD Edwards EnterpriseOne and Vertex Sales Tax Q Series.
International Tax | Be aware of international tax obligations. Decide whether to use the tax calculation software for JD Edwards EnterpriseOne or Vertex Sales Tax Q Series to manage and process non-U.S. and non-Canadian tax transactions.

### Understanding Databases Used by Vertex Sales Tax Q Series

The Vertex Sales Tax Q Series system stores information in these databases:

Database | Description
GeoCoder Database | The GeoCoder database stores jurisdictional tax data for all U.S. and Canadian tax authorities, which include over 66,000 locations. Tax jurisdictions are identified in Vertex Sales Tax Q Series by a GeoCode. All states and counties are on file, as well as all cities with populations over 250. If a city has a population under 250 and levies a tax, that city is also included in the data modules. Vertex Sales Tax Q Series accesses the GeoCoder database to retrieve GeoCodes based on address book information.
TDM Database | You can customize the Vertex Sales Tax Q Series system for the special needs. You use Tax Decision Maker (TDM) to automate product, customer, and jurisdictional tax exceptions. With TDM, you can set up and maintain tax exceptions and override customer and product exemptions. This information is stored in the TDM database. You access TDM from Vertex Sales Tax Q Series menus.
Rate Database | The Rate database stores tax rates and other tax information for over 66,000 locations in the United States, its trusts and possessions, and Canada. Rates and rules are stored in the Rate database according to GeoCode.
Register Database | The Register database contains a record of transaction processed by Vertex Sales Tax Q Series. The information is used for report management and tax returns processing. You access tax reports from Vertex Sales Tax Q Series menus.

### Prerequisite

For additional information, ensure that you have this Vertex documentation for Vertex Sales Tax Q Series:

- Reference Manual.

- GeoCoder Master List.

- National Tax Rate Directory.

- Tax Decision Maker Taxability Guide.

- User's Guide.

- Training Guide for Tax Professionals.

- Returns User's Guide.

### Setting Up Vertex Sales Tax Q Series

This section provides an overview of the setup for Vertex Sales Tax Q Series and discusses how to:

- Set up the Vertex Sales Tax Q Series constants.

- Test the Vertex Sales Tax Q Series connection.

- Activate Vertex Sales Tax Q Series logging.

#### Understanding the Setup for Vertex Sales Tax Q Series

To automatically perform tax calculations using Vertex Sales Tax Q Series, you must first set up the system.

Vertex Sales Tax Q Series Constants

You must set up the Vertex Sales Tax Q Series constants, which includes activating the interface prior to using Vertex Sales Tax Q Series with JD Edwards EnterpriseOne software.

Note. Settings for constants are loaded during software initialization. Therefore, in order for the settings to take effect, you must exit and restart JD Edwards EnterpriseOne.

Vertex Sales Tax Q Series Connection Verification

After you set up the Vertex Sales Tax Q Series constants, you should conduct a test to determine whether you have successfully connected to the Vertex Sales Tax Q Series system. This test requires that you enter a city, state, and ZIP Code on the Retrieve GeoCode form to see whether a GeoCode is returned. If you receive a GeoCode, the connection is working.

Vertex Sales Tax Q Series Logging

During the initial testing of the interface between JD Edwards EnterpriseOne and Vertex Sales Tax Q Series, you might want to review the values that you send to Vertex Sales Tax Q Series and the values that are generated by that system after processing. To review these before and after values, you must activate the Vertex Sales Tax Q Series logging option.

The Vertex Sales Tax Q Series logging option creates a two-page text file (debug log). The before values that you send are on the first page, and the after values that Vertex Sales Tax Q Series generates are on the second page.

Important! The Vertex Sales Tax Q Series debug log prints two pages of data for every transaction that you process for all users. When the log is activated, it has a negative impact on system performance. After initial setup and testing, be sure to disable the Vertex Sales Tax Q Series logging option.

#### Prerequisites

Set up database connections to establish communication with databases for:

- Vertex Sales Tax Q Series

- Vertex Payroll Tax Q Series

#### Forms Used to Set Up Vertex Sales Tax Q Series

Form Name | FormID | Navigation | Usage
Work With Vertex Q Series Constants Revision | W7306B | Vertex Q Series (G731), Constants. | Set up the constants for using Vertex Q Series.
Retrieve GeoCode | W73GEOA | Enter P73GEO in the Fast Path field. | Review and select GeoCodes by State, City, County or Zip Code.
Vertex Sales Tax Q Series Debug Log | W7306D | On Work With Vertex Q Series Constants Revision, select Vertex Log from the Form menu. | Activate the Vertex Sales Tax Q Series debug log and establishing the path to store the log.

#### Setting Up Vertex Q Series Constants

Access the Work With Vertex Q Series Constants Revision form.

Vertex Q Series Active | Specify whether to use the Vertex Tax Compliance system for tax calculations. Y: Use Vertex system. N: Do not use Vertex system. Instead, use JD Edwards EnterpriseOne tax calculations.
U.S. Country Code | Enter the code used to indicate to the Vertex Sales and Use Tax system that you select to represent the United States.
Canada Country Code | Enter the code used to specify Canada to the Vertex Sales and Use Tax System.
GL Offset | Enter a code that indicates how to locate the tax account for general ledger entries. This field points to automatic accounting instructions (AAIs) that, in turn, point to the tax account. Examples are: PTyyyy - for AP (valued-added tax (VAT) only) RTyyyy - for AR (VAT only) GTyyyy - for GL (VAT only) 4320 - for Sales Orders 4400 and 4410 - for Purchase Orders When setting up VAT and Canadian GST, PTyyyy, RTyyyy, and GTyyyy are the only valid values. For the AP system, a second GL Offset (PT_ _ _ _) is required when the tax setup involves VAT plus use taxes (tax explanation code B). Use AAI PT_ _ _ _ to designate the use tax portion of the setup. For sales taxes, the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Accounts Receivable systems ignore the values in this field. However, the JD Edwards EnterpriseOne Sales Order Management and JD Edwards EnterpriseOne Procurement systems require values in this field.
Vertex Q Series City Compression | Enter an option that specifies whether Vertex Q Series uses the GeoCode city compression capability. With this capability, Vertex Q Series can recognize common abbreviations and misspellings of city names. It is not necessary to fully spell out city names, such as St. Louis (Saint Louis), for Vertex Q Series to recognize them and return the correct GeoCodes. In addition, common misspellings are corrected automatically. For example, it will recognize Bch Haven as Beach Haven, and Filadelphia as Philadelphia.
Division Code | Enter the Vertex Tax Interface the Address Book Category Code to use for Division/Store Code for Sales Tax. The Division/Store Code is used by the Vertex Tax Decision Maker module. The interface will use the corresponding category code based on the value specified in this field.
Customer Class Code | Enter the Address Book Category Code that the Vertex Sales Tax Q Series Interface uses for Customer Class Code for Sales Tax. The Customer Class Code is passed to Vertex Sales Tax Q Series and matched to the Customer Class Code in the Vertex Tax Decision Maker module.
Product Category/ID | Enter the Vertex Tax Interface the Item Branch/Plant category code to use for Product Category for Sales Tax. The Product Category code is used by the Vertex Tax Decision Maker module. The interface will use the corresponding category code from the Item Branch/Plant file based on the value specified in this field.

#### Testing the Vertex Sales Tax Q Series Connection

Access the Retrieve GeoCode form.

To test the Vertex Sales Tax Q Series connection:

1. On Retrieve GeoCode, complete these fields and click Find:

   - State

     Enter CO in this field.

   - City

     Enter DENVER in this field

     If you are properly connected to the Vertex Sales Tax Q Series system, 060310140 appears in the GeoCode column. Click Close.

     If nothing appears in the GeoCode column, you might have a setup or configuration error. Click Close and complete the remaining steps.

2. From the Vertex Q Series menu (G731), select Constants.

3. On Work With Vertex Q Series Constants Revision, verify the values in these fields and change them if necessary:

   - Vertex Q Series Active

     The value in this field must be Y.

   - Canada Country Code

     The value in this field must be CA.

4. Exit and restart JD Edwards EnterpriseOne.

   This caches the values in the Vertex Q Series Tax Constants program (P7306).

5. Ensure that the database administrator verifies:

   - The Data Source, Server, User ID, and Password are set up properly in the Database Connections table.

   - All of the required business functions are mapped to the server where the Vertex Sales Tax Q Series software is located.

#### Activating Vertex Sales Tax Q Series Logging

Access the Vertex Sales Tax Q Series Debug Log form.

On | Enter a value to print Vertex Link/Parm Area. If this field is set to 1, then the Vertex Link Parm Area will be printed before and after calling the Vertex Tax Calculator Program. This feature is to be used with caution, two pages of data will be printed for every transaction going though the Tax Calculator for all users.
Path | Enter the path and file name where the Vertex Sales Tax Q Series debug log will reside, such as C: \Debug\VertexDebug.txt. If you enter the path, be sure to use the correct format for the specific server. If you enter the path and file name as Quantum/debug.txt, the file will be stored on the root directory of the server where Sales Tax Q Series is being run.

### Setting Up AAIs for Vertex Sales Tax Q Series

This section provides an overview of AAIs for Vertex Sales Tax Q Series.

#### Understanding AAIs for Vertex Sales Tax Q Series

When you set up AAIs for a specific type of tax, such as use tax, you must specify the general ledger accounts to debit and credit for the tax amount. These AAI items are used for taxes:

- PTxxxx - JD Edwards EnterpriseOne Accounts Payable system

- RTxxxx - JD Edwards EnterpriseOne Accounts Receivable system

- 4250 - JD Edwards EnterpriseOne Sales Order Management and JD Edwards EnterpriseOne Service Management systems

- 4350 - JD Edwards EnterpriseOne Procurement system

In the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Accounts Receivable systems, you set up AAIs for business units and object accounts by company. In the JD Edwards EnterpriseOne Sales Order Management, JD Edwards EnterpriseOne Service Management, and JD Edwards EnterpriseOne Procurement systems, you set up AAIs for business units and object accounts by company as well as by document type and GL offset.

AAI Items PTxxxx and RTxxxx

The system is hard coded to use the tax AAIs for the company. If a GL offset exists in the Vertex Q Series constants, the system uses AAI item PTxxxx or RTxxxx, where xxxx is the GL offset. Otherwise, it uses PT or RT.

In this example, the company is 200, the GL offset is 0400, and the search sequence is:

- GL offset 400, Company 00200

- GL offset 400, Company 00000

- Blank GL offset, Company 00200

- Blank GL offset, Company 00000

When you set up AAIs for accounts payable and accounts receivable taxes, you can set up GL accounts by state. If you do this, you must assign the state code to the subsidiary of the base account in the F0901 table.

Note. (CAN) The Vertex GeoCode database considers all of Canada a single state. If you set up GL accounts by state, you must use state code 70 for Canada. Vertex Sales Tax Q Series does not recognize the different provinces of Canada as separate states.

During the post process, the system follows this sequence to identify the proper account:

- The system retrieves the business unit and object that AAI item PTxxxx or RTxxxx specifies, based on the company on the invoice or voucher.

- The system retrieves the state code from the GeoCode.

- The system attaches the state code, which is the first two digits of the GeoCode, to the business unit and object as the subsidiary.

- The system searches the F0901 table for an account number with that business unit, object, and subsidiary combination.

- If the system finds the account combination, it uses it as the GL account.

- If the system does not find the account combination, it searches the F0901 table for an account with the business unit and object only. If the system finds the account combination, it uses it as the GL account.

- If the system does not find the account combination, it searches the F0901 table using the business unit and object for Company 00000 for the specific AAI item PTxxxx or RTxxxx. If the system finds the account combination, it uses it as the general ledger account.

JD Edwards EnterpriseOne Sales Order Management, JD Edwards EnterpriseOne Service Management, and JD Edwards EnterpriseOne Procurement

The system uses AAI items 4250 and 4350 for the document type. In this example, the company is 200, the GL offset is 400, and the search sequence is as:

- Company 00200, OP, GL offset 0400.

- Company 00000, OP, GL offset 0400.

- Company 00200, OP, blank GL offset.

- Company 00000, OP, blank GL offset.

### Setting Up User-Defined Codes for Vertex Sales Tax Q Series

For you to assign a GeoCode or change a GeoCode on an address book record, the record must contain a valid search type code from UDC table 73/ST (GeoCode Assignment Search Type). The search type validation is for address book records only, not transactions.

Typically, UDC table 73/ST contains these search types:

- C

  Customer

- F

  Facilities

- V

  Supplier

The Update Address Book GeoCodes program (R730101) uses the values in UDC table 73/ST to add GeoCodes to existing address book records.

### Processing Taxes for Stock and Nonstock Items

This section provides an overview of processing taxes for stock and nonstock items and discusses how to assign non-stock product categories to order types.

#### Understanding the Tax Process for Stock and Nonstock Items

Vertex Sales Tax Q Series processes taxes for these items:

- Stock items. Typically, these items are products that need to have records in the Item Master (F4101) and Item Branch File (F4102) tables.

- Nonstock items. These items are not required to have records in the F4101 and F4102 tables; however, they can exist on an order and have taxes assigned to them.

For both stock and non-stock items, Sales Tax Q Series searches for a value in the Product Category and Transaction Type fields to be used by the Tax Decision Maker (TDM).

For stock items, the value in the Product Category/ID field is typically derived from the category code on the item branch/plant record. The category code that is used depends on what is set up in the Vertex Q Series constants. The transaction type is usually derived from the system code of the order. For the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Procurement systems, the transaction type is PURCH, and for the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Sales Order Management systems, the transaction type is SALE.

For nonstock items, you can specify a Vertex Sales Tax Q Series product category and transaction type for an order type and line type combination. The Vertex Sales Tax Q Series product category is used for product exceptions in TDM. The Vertex Sales Tax Q Series transaction type specifies the type of transaction, such as sales, purchase, rental, or service, so that Vertex Sales Tax Q Series can apply the appropriate tax.

For non-stock order lines such as freight or lease charges, use the Non-Stock Product Categories program (P7307) to specify the product category and transaction type.

Hierarchy for Product Category IDs and Transaction Types

The JD Edwards EnterpriseOne software determines the values that it passes to the Vertex Sales Tax Q Series Product Category/ID and Transaction Type fields in the Tax Decision Maker (TDM) based on a specific hierarchy.

The system searches for a value in the Product Category/ID field on the Work With Vertex Q Series Constants Revision form. Depending on whether the field is blank, the system continues to one of these:

- If the field is blank, the system searches the Quantum Non-Stock Product Category (F7307) table and uses the document type and line type of the order.

  If a record exists in the F7307 table for that document type and line type combination, the system uses the product category ID and transaction type that corresponds to that record.

  If no record exists in the F7307 table for that document type and line type combination, the system uses a blank for the product category/ID. The transaction type is determined by the system code on the order.

- If the field is not blank, the system searches the corresponding category code in the item branch/plant record for that item on the order. Then,:

  If an item branch/plant record does not exist, or if the respective category code on the item branch/plant record is blank, the system returns to step 1 to determine both the product category ID and the transaction type.

  If the item branch/plant record does exist and if the respective category code on the item branch/plant record is not blank, the system uses the category code for the product category/ID and returns to step 1 to determine the transaction type.

#### Forms Used to Assign Non-Stock

Form Name | FormID | Navigation | Usage
Work With Non-Stock Product Categories | W7307C | Vertex Q Series (G731), Non-Stock Product Categories. | Review and select non-stock product categories.
Non-Stock Product Categories Revision | W7307D | Click Add on the Work With Non-Stock Product Categories form. | Add and revise non-stock product category information.

#### Assigning Non-Stock Product Categories to Order Types

Access the Non-Stock Product Categories Revision form.

Order Type | Enter a user-defined code (00/DT) that identifies the type of document. This code also indicates the origin of the transaction. The JD Edwards EnterpriseOne system has reserved document type codes for vouchers, invoices, receipts, and time sheets, which create automatic offset entries during the post program. (These entries are not self-balancing when you originally enter them.) These document types are defined by The JD Edwards EnterpriseOne system and should not be changed: P: JD Edwards EnterpriseOne Accounts Payable R: JD Edwards EnterpriseOne Accounts Receivable T: JD Edwards EnterpriseOne Payroll I: JD Edwards EnterpriseOne Inventory Management O: JD Edwards EnterpriseOne Procurement J: JD Edwards EnterpriseOne General Accounting/Joint Interest Billing S: JD Edwards EnterpriseOne Sales Order Management
Line Type | Enter a code that controls how the system processes lines on a transaction. It controls the systems with which the transaction interfaces, such as JD Edwards EnterpriseOne General Accounting, JD Edwards EnterpriseOne Job Cost, JD Edwards EnterpriseOne Accounts Payable, JD Edwards EnterpriseOne Accounts Receivable, and JD Edwards EnterpriseOne Inventory Management. It also specifies the conditions under which a line prints on reports, and it is included in calculations. Codes include: S: Stock item J: Job cost N: Nonstock item F: Freight T: Text information M: Miscellaneous charges and credits W: Work order
Vertex Product Category | Enter a user-defined code used in the Vertex Tax Decision Maker for products or services that are non-taxable or are at a non-standard rate. Enter a value from UDC table (73/PC) (Vertex Product Categories) in this field. You can have only one line type and order type combination for a product category code.
Vertex Transaction Type | Vertex Sales Tax Q Series transaction type. Enter a value from UDC table (73/TY) (Vertex Transaction Type) in this field.

### Defining Tax Information for Items

This section provides an overview of defining tax information for items and discusses how to:

#### Understanding Tax Information for Items

To apply a tax to the sales or purchase of an item, you perform two tasks to specify that the item is taxable:

- Set the Sales Taxable and Purchasing Taxable fields for the item on the Item Branch/Plant Info form to yes. For non-stock items, set these fields on the line type definition.

- Assign the item to a tax category code.

In Vertex Sales Tax Q Series, the tax category corresponds to product categories that you define in Tax Decision Maker (TDM) for any special tax exceptions or overrides. For example, when you sell a stock item, the JD Edwards EnterpriseOne Sales Order Management system passes the tax category code to Vertex Sales Tax Q Series.

Before Vertex Sales Tax Q Series calculates the tax, it compares the tax category code with TDM product categories. If it finds a TDM setting for the category as taxable, exempt, or otherwise, TDM dictates how Vertex Sales Tax Q Series specifies a tax. If it does not find a TDM setting for the category, Vertex Sales Tax Q Series taxes the item at the standard rate for that jurisdiction.

Taxes are calculated for items only if the customer or supplier master record is specified as taxable. If no tax information exists on the customer or supplier master record, no record is written to the Vertex Sales Tax Q Series register.

#### Prerequisite

Set the processing option for Category Code on the Process tab to 1 to automatically display the Category Codes form when you add a new item.

#### Forms Used to Define the Tax Fields for an Item

Form Name | FormID | Navigation | Usage
Work With Item Branch | W41026E | Inventory Master/Transactions (G4111), Item Branch/Plant. | Review and select items that are set up for the branch/plant.
Item/Branch Plant Info. | W41026A | On the Work With Item Branch form, select an item record. | Add and revise item records, specifically to define the tax fields.
Category Codes | W41026G | On the Work With Item Branch form, select Category Codes from the Row menu. Click OK on the Item/Branch Plant Info form. | Depending on the setting of the processing option, the Category Codes form appears automatically when you add a new item and click OK.

#### Defining the Tax Fields for an Item

Access the Item/Branch Plant Info. form.

For sales tax, complete the field for which the alias is the same as the value that you specified in the Product Category/ID field under Sales Tax Category Codes on the Work With Vertex Q Series Constants Revision form.

For example, if you entered SRP7 in the Produce Category/ID field on the Work With Vertex Q Series Constants Revision form, locate the field with an alias of SRP7 (Category Code 7) on the Category Codes form and enter a value in that field.

For use tax, complete the field for which the alias is the same as the value that you specified in the Product Category/ID field under Use Tax Category Codes on the Work With Vertex Q Series Constants Revision form.

The category codes that you enter in these fields can be the same if that meets the business requirements.

### Working With GeoCodes and Address Book Records

This section provides overviews of how to assign GeoCodes, assigning GeoCodes globally, assigning GeoCode manually, and how to override GeoCodes; lists a prerequisite, and discusses how to:

- Run the Update Address Book GeoCodes program.

- Run the Effective Address Update program.

#### Understanding How to Assign GeoCodes to Address Book Records

After you activate the Vertex Sales Tax Q Series system, you must assign GeoCodes to existing address book records. That is, you must set up GeoCodes for every customer, supplier, ship to address, ship from address, warehouse, or branch/plant in the address book. The Tax Decision Maker uses GeoCodes to calculate sales and use taxes for each customer and specific location.

A GeoCode is a nine-digit code that represents a taxing jurisdiction. All GeoCodes are defined and maintained by Vertex, Inc. Each GeoCode has this format:

XXYYYZZZZ where

XX = State

YYY = County

ZZZZ = City

You can assign GeoCodes to address book records manually or use a batch program. You should run the batch program first in order to automatically assign as many address book records as possible. You can use the manual process to assign a GeoCode to a new address book record.

If you use Vertex Sales Tax Q Series, the Tax Rate/Area field in the JD Edwards EnterpriseOne master and transaction tables is used to store the assigned GeoCode. Alternatively, you can use the Vertex Sales Tax Q Series system as well as the JD Edwards EnterpriseOne Tax Rate/Areas program (P4008).

Each GeoCode has a prefix of V, M, or O within JD Edwards EnterpriseOne systems:

GeoCode | Description
V (Vertex GeoCode) | A prefix of V on the nine-digit GeoCode identifies the code as a GeoCode assigned by Vertex.
M (Multicounty Situation) | A prefix of M is assigned when postal codes cross two or more county boundaries. You must review the records and manually assign the appropriate GeoCode based on the county.
O (Outside City Limits) | A prefix of O indicates that an address is not physically located within the city limits and, therefore, is not subject to city tax. You must manually change the first character of the GeoCode to O. Sales Tax Q Series does not calculate the city tax for that GeoCode.

Note. Vertex does not define GeoCode jurisdictions outside of the U.S. and Canada and does not maintain tax rates for these jurisdictions. You can create GeoCodes, beginning each GeoCode with 77 (in the state field), to create records in TDM for each non-U.S. or non-Canadian jurisdiction.
Additionally, you can set up the Vertex TDM Override table to maintain tax rates for each non-U.S. or non-Canadian taxing authority.

Calculating Taxes for Related Addresses

For Vertex Sales Tax Q Series to calculate taxes for various jurisdictions, laws, and regulations, the GeoCodes might be based on one of these three locations:

Field | Description
Ship To | The Ship To location is generally the customer's location in a sales or purchase transaction. For example, the cost center, office, or plant location for the customer might be the Ship To location. The system calculates consumer's use tax if you are the customer for the purchase.
Ship From | The Ship From location is generally the plant or warehouse of the seller who is delivering the product or service. Different sales tax calculation rules might apply for intrastate (Ship To and Ship From locations are in the same state) or interstate (Ship To and Ship From locations are in different states) transactions.
Order Acceptance | The Order Acceptance location is the place where the seller accepts, acknowledges, or receives the actual order. The Order Acceptance location is integral to determining the correct tax on an interstate or intrastate transaction.

#### Understanding How to Assign GeoCodes Globally

You can use these batch programs to update GeoCode information in multiple address book records:

- Update Address Book GeoCodes (R730101).

- Effective Address Update (R01840).

Update Address Book GeoCodes

Use the Update Address Book GeoCodes program (R730101) to add GeoCodes to existing address book records. The system stores the GeoCode in the Tax Rate/Area field of either the Customer Master by Line of Business (F03012) or the Supplier Master (F0401) tables.

When you run the Update Address Book GeoCodes program, the system updates the Tax Rate/Area field with the appropriate GeoCode.

The system does not update the field if any of these are true:

- The customer master or supplier master does not have a tax explanation code of E, U, or S.

- An address book record crosses multiple tax jurisdictions.

- Not enough information is available for the address in order to find a GeoCode.

- The country code on the address does not match the codes that are set up in the constants for the United States and Canada.

- The state code on the address is incorrect.

The system generates a report that contains this summary information:

- Number of records updated.

- Number of multi-county invalid messages.

- Number of country code invalid messages. The code must match the value in the Vertex Q Series Constants.

- Number of state invalid messages.

- Number of tax explanation code invalid messages.

  Note. F03012 and F0401 records must have a valid tax explanation code before you run the Update Address Book GeoCodes program. In addition, UDC 73/ST must contain all of the search types to be used by this program.

Updating Effective Dates on Address Book Records

Run the Effective Address Update (R01840) program to verify effective dates of addresses and to update corresponding supplier and customer records accordingly. The system stores the GeoCode in the Tax Rate/Area field of either the F03012 or the F0401 tables.

The Effective Address Update program does not update the supplier master and customer master records if any of these are true:

- The Tax Explanation Code field is missing the correct code of S, U, or E.

- The Tax Rate/Area field contains a value that is not a GeoCode or is blank.

- A GeoCode cannot be assigned because of incomplete information or an address (city, state, and zip code) crossing multiple tax jurisdictions.

The system generates a report that displays both unmatched records and records that you might want to match. The system sends messages to the Work Center that identify unmatched records. Messages in the Work Center are sent to the user who is processing the batch report, based on the User ID. You will need to manually update these records.

#### Understanding How to Assign GeoCodes Manually

The system assigns a GeoCode to the records in the Business Unit Master (F0006), F0401, and F03012 tables, based on these fields in the mailing address for the corresponding address book record:

- City

- State

- Postal Code

- County

You might need to manually change or assign GeoCodes for these reasons:

- You have added a new address book record for a customer or supplier.

- An existing Address Book Master (F0101) table was changed.

- The address is outside city limits.

- A multicounty situation exists for an address book record. The possible GeoCodes display in a multicounty window.

- Due to data errors, records were not updated when you ran the Update Address Book GeoCodes and Effective Address Update programs.

When a multicounty situation exists, use the Retrieve GeoCode form to select a GeoCode. The Retrieve GeoCode form lists all of the possible GeoCodes that correspond to county names and postal code ranges.

When you change an address, the system updates any existing GeoCode. If the address change results in a different GeoCode, the system also updates the Tax Rate/Area field in the F03012 and F0401 tables.

If any of these conditions exist, the system does not update the Tax Rate/Area field:

- The proper tax explanation code is not assigned (S, U, or E).

- Errors occurred.

- The mailing address resides in multiple tax jurisdictions.

Depending on the type of address book record, perform one of these tasks to assign GeoCodes to business units, suppliers, and customers:

- Assign GeoCodes to business units manually.

  You assign the GeoCode to a business unit as you would any other tax rate area, however, the GeoCode must begin with a prefix of V, M, or O.

  Note. The business unit tax explanation code is always S (sales tax) if you are working with the JD Edwards EnterpriseOne Service Management system.

  See Setting Up Default Values for Taxes.

- Assign GeoCodes to suppliers manually.

  You assign GeoCodes to suppliers as you would any other tax information.

- Assign GeoCodes to customers manually.

  You assign GeoCodes to customers as you would any other tax information.

  Note. When you use the Search button to find the value for the Tax Rate/Area field on any form, the system verifies whether Vertex Sales Tax Q Series is activated in the Vertex Q Series Constants. If so, the system first displays GeoCodes from which you can review and select appropriately. If no GeoCodes are displayed, either the connection to Vertex Sales Tax Q Series is not correct or the address is incorrect.
  To review JD Edwards EnterpriseOne tax rates/areas, click Close. The system displays JD Edwards EnterpriseOne tax rates/areas.

#### Understanding How to Override GeoCodes

After you assign GeoCodes to address book records, you might need to override a GeoCode on a specific transaction such as an invoice, voucher, or contract billing line. You might need to override a GeoCode if a tax jurisdiction changed or if the wrong address was used for a particular transaction, resulting in an incorrect GeoCode.

Note. Locate the correct GeoCode for the address that you will be using to override tax information by entering P73GEO in the Fast Path field.

You use the Vertex Tax Decision Maker (TDM) to set up overrides to standard GeoCodes as contained in the Vertex database. TDM works in conjunction with these JD Edwards EnterpriseOne systems and associated programs:

System | Program
JD Edwards EnterpriseOne Accounts Payable | These programs apply to the JD Edwards EnterpriseOne Accounts Payable system: Supplier Master (P04012) Multi Company - Single Supplier (P041016) Multi-Voucher Entry (P041017) AP Standard Voucher Entry (P0411) AP Speed Voucher Entry (P0411SV)
JD Edwards EnterpriseOne Procurement | These programs apply to the JD Edwards EnterpriseOne Procurement system: Purchase Orders (P4310) Purchase Order Workbench (P43101) Voucher Match (P4314) Order Revision History (P43205) Release Open Quotations (P43360)
JD Edwards EnterpriseOne Accounts Receivable | These programs apply to the JD Edwards EnterpriseOne Accounts Receivable system: Customer Master (P03013) Standard Invoice Entry (P03B11) Speed Invoice Entry (P03B11SI)
JD Edwards EnterpriseOne Sales Order Management | These programs apply to the JD Edwards EnterpriseOne Sales Order Management system: Sales Order Entry (P4210) Online Invoice Inquiry (P42230)
JD Edwards EnterpriseOne Service Management System | These programs apply to the JD Edwards EnterpriseOne Service Management system: Contract Revisions (P1721) Work Order Revisions (P17714) Work Order Quote (R17711) On Line Work Order Quote Inquiry (P17717) Maintenance Request Entry (P17501)
JD Edwards EnterpriseOne Contract Billing | The Contract Billing Line Detail Revisions (P5202) program applies only to the JD Edwards EnterpriseOne Contract Billing system.
JD Edwards EnterpriseOne Service Billing | These programs apply to the JD Edwards EnterpriseOne Service Billing system: Tax Derivation Information (P48127) Work With Work Orders (P48201) Job Cost Master (P51006) Business Units (P0006)

When a JD Edwards EnterpriseOne program calls TDM, the TDM determines:

- Whether the transaction is interstate or intrastate.

- The taxing jurisdiction of the transaction.

- The appropriate tax rate.

- The maximum tax base.

- Excess amounts, if applicable.

TDM then:

- Retrieves the appropriate tax rate.

- Calculates tax amounts.

- Returns the amount to the JD Edwards EnterpriseOne program.

  Note. In the JD Edwards EnterpriseOne Service Management system, the system does not calculate taxes until you run the Service Contract Workfile Generation program (R1732) or the S&WM Work Order Workfile Generation program (R1775) in final mode. However, the system does calculate taxes when you create a service order quote or enter a call.

Vertex Sales Tax Q Series does not calculate tax based on the gross amount of the transaction. You must enter the taxable amount for the system to make the calculation.

The GeoCode must begin with a V, M, or O.

Overriding GeoCodes on an Invoice

This information is supplied based on the sold to and ship to addresses on the F0301 table.

Vertex Sales Tax Q Series does not calculate tax based on the gross amount of the transaction. You must enter the taxable amount for the system to make the calculation.

After you assign GeoCodes to the customers, the system uses the GeoCode to supply default tax information when you enter an invoice. You can override the tax information that is supplied by the system when you enter the invoice.

The system creates accounting entries for sales taxes when you post the invoice based on the AAI item RTxxxx, which points to the sales tax account.

You can also override tax information using the Speed Invoice Entry program (P03B11SI).

Overriding GeoCodes on a Voucher

After you assign GeoCodes to the suppliers, the system uses the GeoCode on the voucher header to supply default tax information when you enter a voucher. You can override the tax information that is supplied by the system when you enter the voucher.

The system creates accounting entries for use taxes when you post the voucher. AAI item PT (no GL offset) points to the use tax account.

You can also override tax information using other voucher-entry methods.

Overriding GeoCodes on a Sales Order

You can override GeoCodes on the order header or on a detail line of the sales order. When you enter or revise the information on the detail lines, the system calculates taxes only for those items containing tax information, not on the entire sales order. This enables you to use different tax rates or tax types (sales, use, or exempt) on a line-by-line basis.

If you need to override GeoCodes that were retrieved from the customer master record, you can use either the Sales Order Header form or the Sales Order Detail Revisions form. You can also revise the GeoCode either before or after you generate the invoice from the sales order. If you revise the GeoCode after the invoice in generated, you must change the GeoCode on the sales order and then regenerate the invoice.

Important! You can override a GeoCode on a sales order detail line either before or after you accept the entry of the sales order. If you change the tax information after you accept the entry and create the invoice, be sure to change the tax information on the sales order and regenerate the invoice.

Overriding GeoCodes on a Purchase Order

You can override GeoCodes for tax information that is specific to a detail line in a purchase order. This tax information is used by the system to determine whether taxes apply to the items or services on the detail line and how the system calculates the taxes.

Note. You can review and revise tax information on the Order Detail, Purchase Order Workbench, and Voucher Match forms.

Overriding GeoCodes on a Service Contract

When you enter service contracts, you can revise and override detail information about the contract such as customer entitlements, service packages, item numbers, billing information.

You can override tax information on a contract when you create a contract using direct entry, or you can later change tax information using the same form.

Note. In the JD Edwards EnterpriseOne Service Management system, the system does not calculate taxes until you run the Service Contract Workfile Generation program (R1732) in final mode.

Overriding GeoCodes on a Service Order

You can override tax information when you enter or modify a service order. Typically, you enter a service order under these circumstances:

- You need to bill for the parts that are required to fix a piece of equipment.

- You need to send a technician to the site to repair the problem.

- You use a service provider to resolve the problem, and you need to create a voucher for payment.

You can retrieve numerous default values from a parent service order. For example, you can use values from a parent service order to retrieve this information:

- Service type

- Start date

- Planned completion date

  Note. You should override the GeoCode for a service order prior to running the S&WM Work Order Workfile Generation program (R1775). In the S&WM Work Order Workfile Generation program, the system calculates taxes when you create a service order quote. The system does not calculate final taxes until you run the program in final mode.

Overriding GeoCodes on a Call

When you enter a call record, you store customer tax information to use for billing. The tax information is stored in the F0301 table. You can override tax information if the initial GeoCode assigned to the call record needs to be revised.

Note. To calculate taxes on a call, you must set the Maintenance Request MBF Processing Options (P1700140).

Overriding GeoCodes on a Contract Billing Line

When you bill the customers, you might need to override or set up tax information to meet specific tax requirements associated with the type of work that you perform for the customer.

To override tax information, the system uses these tables, in the order listed, to search for and calculate tax information:

1. F5202

2. F5201

3. F0301

You can override tax information on the contract header record and at the billing line level.

Overriding GeoCodes in the JD Edwards EnterpriseOne Service Billing System

When you bill the customers, you might need to override or set up tax information to meet specific tax requirements associated with the type of service that you perform for the customer.

To override tax information, the system uses these tables, in the order listed, to search for and calculate tax information:

1. F48127

2. F4801

3. F0006

#### Prerequisite

Verify that you have set up the address book search types in UDC 73/ST for GeoCode assignments. When you update GeoCodes, the system determines which address book records to update with GeoCodes, based on the search type. Only those records with search types specified in UDC 73/ST will be updated.

#### Running the Update Address Book GeoCodes Program

Select Vertex Sales Tax Q Series (G731), Update Address Book GeoCodes.

#### Running the Effective Address Update Program

Select A/B Advanced & Technical Operations (G0131), Effective Address Update.

### Processing Vertex Sales Tax Q Series Tax Information

This section provides an overview of the tax process when using Vertex Sales Tax Q Series.

#### Understanding the Tax Process When Using Vertex Sales Tax Q Series

The JD Edwards EnterpriseOne system calculates preliminary tax information when transactions are entered. In some cases, the taxes cannot be changed after this calculation. In some systems the final calculation is not completed until the transactions are processed. The software uses the value entered in the Tax Rate/Area field to calculate the taxes on any transaction or portion of a transaction.

When you post accounts payable and accounts receivable information to the general ledger, the system posts tax information for the Vertex Sales Tax Q Series system to the Vertex Tax Register. In some cases, you can specify the general ledger accounts to which the system posts the taxes.

When you post transactions from software suites that have already written tax records in the Vertex Tax Register, the post ignores the tax information. If you are using the JD Edwards EnterpriseOne Tax Rate/Areas program (P4008), the post will write to the F0018 table.

You can select to print tax information when you print documents for the customers.

These JD Edwards EnterpriseOne product suites can create records in the Vertex tax register:

- Financial Management.

- Logistics.

- Service Management.

- JD Edwards EnterpriseOne Contract Billing and JD Edwards EnterpriseOne Service Billing.

Financial Processes

When JD Edwards EnterpriseOne financial applications such as the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Accounts Payable systems create financial records, the General Ledger Post Report program (R09801) writes tax information to the Vertex Tax Register.

Tax information is calculated based on the value in the Tax Rate/Area field of the F0411 and F03B11 tables, and appears on the voucher and invoice transactions as they are entered. If sales or use taxes exist, the amount that is recorded in the general ledger income or expense distribution equals the invoice or voucher amount plus the tax amount. Sales tax amounts are included in the gross amount of the invoice or voucher. Use tax amounts are not included in the gross amount of the invoice or voucher.

Distribution Processes

When financial records are created in a Distribution system, such as the JD Edwards EnterpriseOne Sales Order Management system or the JD Edwards EnterpriseOne Procurement system, that system writes tax information to the Vertex Tax Register. JD Edwards EnterpriseOne financial programs ignore tax information from transactions that originate with Distribution processes and do not write to the Vertex Tax Register in order to prevent duplicate records.

For example, when the Sales Update program (R42800) creates accounts receivable records, the General Ledger Post Report program (R09801) ignores these accounts receivable records and does not write to the Vertex Tax Register.

JD Edwards EnterpriseOne Service Management System Processes

The JD Edwards EnterpriseOne Service Billing system creates financial records for the JD Edwards EnterpriseOne Service Management system. The JD Edwards EnterpriseOne Service Billing system stores the tax information in the Vertex Tax Register when records are created in the F03B11 and F0911 tables. Records are created in these tables by running the Invoice Generation program (R48121) in final mode. The General Ledger Post Report program (R09801) ignores the tax information in the invoice records that are created by the Invoice Generation program and does not create any records in the Vertex Tax Register.

Contract Billing and Service Billing Processes

When financial records are created in the F03B11 and F0911 tables through the JD Edwards EnterpriseOne Contract Billing and JD Edwards EnterpriseOne Service Billing systems, tax information is written to the Vertex Tax Register. Records are written to these tables when you run the Create AR Entries program (R48199). The General Ledger Post Report program (R09801) ignores the tax information on the invoice and general ledger records created for the account by the JD Edwards EnterpriseOne Contract Billing and JD Edwards EnterpriseOne Service Billing systems.

### Printing Tax Information

You can print calculated taxes when you print a contract, sales order, purchase order, invoice, or voucher in these JD Edwards EnterpriseOne programs:

System | Report
JD Edwards EnterpriseOne Accounts Payable | Voucher Journal Report (R04305)
JD Edwards EnterpriseOne Procurement | Purchase Order Print (R43500) Order Detail Print (R4401P)
JD Edwards EnterpriseOne Accounts Receivable | Invoice Print (R03B505)
JD Edwards EnterpriseOne Sales Order Management | Print Invoices (R42565)
JD Edwards EnterpriseOne Service Management | Work Order Quote (R17711)
JD Edwards EnterpriseOne Contract Billing and JD Edwards EnterpriseOne Service Billing | Invoice Print Selection (R48504)