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Calculate Consumer Use Tax on Purchase Transactions

The consumer use assessment and accrual capability in Microsoft Dynamics NAV lets you assess the consumer use tax on purchases in real-time and accrue the applicable tax amount. Calculate and verify the use tax if the vendor hasn’t charged it, accrue the use tax, and save the transaction to AvaTax for consumer use reporting. AvaTax also settles your Microsoft Dynamics NAV GL accounts for the accrual amount. Downloading a file of the consumer use tax calculated on your transactions can minimize audit risk by giving you better information about your liability.

Note:

Configure consumer use tax

Before you start calculating consumer use tax in Microsoft Dynamics NAV, you need to enable the following use tax assessment options in Microsoft Dynamics NAV:

  1. Go to Microsoft Dynamics NAV > Home > Departments > AvaTax > Setup > AvaTax Configuration > Tax Calculation tab and select the Enable Use Tax Assessment option.

    DNAV_AvaConfig_AP.png

  2. Go to Microsoft Dynamics NAV > Home > Departments > AvaTax > Utilities > Vendor Use Tax Assessment and select the Enable Use Tax Assessment option.

    DNAV_2_VendorCard.png

Calculate consumer use tax

To calculate consumer use tax, follow these steps:

  1. In Microsoft Dynamics NAV, go to Home > Departments > Purchase > Order Processing > Lists and click New to create a Purchase Order or Purchase Invoice as applicable.
  2. To calculate the consumer use tax, click either Statistics (F7) or Post (F9) > Verify Tax. Messages are displayed based on the accrue amount suggested.
    • The amount of tax charged to the vendor/seller is correct, i.e. the accrue amount is 0. 

      DNAV_7_No Accrue.png

    • The amount of tax charged to the vendor/seller is greater than the amount charged by AvaTax, i.e. the accrue amount is negative.

      DNAV_6_Overcharged.png

    • The amount of tax charged to the vendor/seller is less than the amount charged by AvaTax, i.e. the accrue amount is more than 0.

      DNAV_5_2UnderchargedwithYesNo.png

      • Click No if you don't want to accrue the self-assessed consumer use tax.
      • Click Yes if you want to accrue the self-assessed consumer use tax. After you click Yes, the consumer use tax is calculated for this transaction and it is posted to the Admin Console.