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Article #211 How to Exempt a Customer of Taxes?

Answer: By default, Solid Business Central is installed with ‘Standard Taxes’, which are typically set as a Federal Tax and a State Tax. The system can also be configured however to manage as many taxes as necessary by switching over to ‘Multiple Tax’ mode, making it easy to specify any number of Tax Items and group them together by using Tax Groups. For more information on enabling and using ‘Multiple Taxes’ please read Solid Know How Article #194 How to Set Up Multiple Taxes in Solid Business Central.

In order for a tax to be charged within the Solid Route Accounting business system, both the customer being sold to as well as the inventory item being sold must both be assigned to that tax. If either the customer or the inventory item is not assigned to that tax, it will then be exempt. To exempt a customer or item from being taxed is an easy process that can be accomplished by following the steps below for whichever taxation system is being used.

Standard Taxes:
If the business system is set up to use Standard Taxes, perform the following steps to exempt a customer or inventory item from taxes:
Customer Record: In Solid Business Central, navigate to [Datafile / Customer / View] and display the desired Customer Record. Use [F2 – Edit] to make changes to that record, and in the ‘State Tax’ or ‘Fed Tax’ field (‘PST No’ and ‘GST No’ for Canadian clients) enter something into that field for that tax to be exempt; preferably a tax exemption number if available. Save the record with [CTRL+END] and this customer is now exempt of that tax.

Inventory Record: In Solid Business Central, navigate to [Datafile / Inventory / View] and display the desired Inventory Record. Use [F2 – Edit] to make changes to that record, and use the [Enter] or [Tab] key to get into the body of the item record. To exempt a tax, simply set the ‘FTx’ or ‘STx’ (‘GST’ or ‘PST’ for Canadian clients) to ‘N-No’. Save the record with [CTRL+END] and this item is now exempt of that tax.

Multiple Taxes:
In business systems that are using Multiple Taxes, Customer Records and Inventory Records are assigned to a single ‘TaxID’, which can be either a Tax Item or Tax Group.
Full Exempt: To exempt a Customer Record or Inventory Record of all taxes, simply display that record in Solid Business Central and ensure the ‘TaxID’ field is blank.

Partial Exempt: In order for a tax item to be applied, it must be assigned to both the Inventory and Customer Record being invoiced. Taxes are set within a record’s ‘TaxID’ field as either a Tax Item or a Tax Group. If that customer or inventory item belongs to a Tax Group, then the tax exemption is controlled by what Tax Items do not belong to that Tax Group. Tax Groups can be reviewed in Solid Business Central at [System / Configure / Company / Tax Group]. Display the desired Tax Group to verify what all tax items belong to this group in the ‘Allocated Tax Items’ window on the right. Use the [F2 – Edit] key if changes need to be made to this Tax Group, and follow the ‘Menu Choices’ along the bottom of the screen to add or remove Tax Items to or from this group.

Last modified on Friday, 16 February 2018 11:07

Additional Info

  • Software Components: Solid Business Central
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