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What is Product Exemption Maintenance and how is it used?

Overview

What is Product Exemption Maintenance and how is it used?

Environment

SalesTaxII 

Resolution

The purpose of this menu item is to allow the user to identify exempt products or exempt areas of the country to the system. Use this menu to exempt specific products or freight.
The system exempts certain products from tax or exempts states, counties, or cities without qualification.
Commodity Code is added to the Unqualified or Product Exemption Maintenance screen. This allows the addition of Product/Commodity codes in SalesTaxII.
After choosing this menu item a screen similar to this one appears. This example uses and exempt product called ‘FOOD’ with an Illinois ‘food for home consumption’ exemption , and Commodity Code FH.

 

 

 

A transaction for the product ‘FOOD’ is entered, but the product is not designated as ‘food for home consumption’.

 

 

As a result, all taxes are calculated.

 

 

Here, a transaction with the FH Commodity Code is entered, but no check for a product exemption is made.

 

 

As a result, the normal FH calculation takes place.

 

 

Finally, a transaction with the FH Commodity Code is entered for the product ‘FOOD’.

 

 

As a result, no tax is calculated.

 

 

Complete this screen as follows:
To Exempt an Entire State or Federal in Canada (GST)
1. Company Code = Five character Company Code. Default is the value set in the ‘SalesTaxII System Control File Maintenance’ screen. The Setting up SalesTaxII section of the SalesTaxII Install Guide walks you through this process in the first step under One Time Steps.
2. State Code = State abbreviation or CN for Canada.
3. Exempt Product = Product code, FRGHT, SERVC, or whatever you use to identify line items on an order or invoice to be exempted. For unqualified exemption leave blank.
4. City/County Name List Start Point = leave blank.
5. C=List, T=List Counties = leave blank.
To Exempt Entire Counties, and/or All Cities in Various Counties, or Entire Canadian Provinces
1. Company Code = Five character Company Code. Default is the value set in the ‘SalesTaxII System Control File Maintenance’ screen. The Setting up SalesTaxII section of the SalesTaxII Install Guide walks you through this process in the first step under One Time Steps.
2. State Code = State abbreviation or CN for Canada.
3. Exempt Product = Product code, FRGHT, SERVC, or whatever you use to identify line items on an order or invoice to be exempted. For unqualified exemption leave blank.
4. City/County Name List Start Point = The County or Canadian Province name at which the selection screen that follows begins listing. (partial name is OK)
5. C=List, T=List Counties = Key a ‘C’ for county or ‘P’ for Canadian Province.
To Exempt Cities
1. Company Code = Five character Company Code. Default is the value set in the ‘SalesTaxII System Control File Maintenance’ screen. The Setting up SalesTaxII section of the SalesTaxII Install Guide walks you through this process in the first step under One Time Steps.
2. State Code = State abbreviation (Canada city names provided with enhanced SalesTaxII only since no taxation takes place at this level).
3. Exempt Product = Product code, FRGHT, SERVC, or whatever you use to identify line items on an order or invoice to be exempted. For unqualified exemption leave blank.
4. City/County Name List Start Point = The City name at which the selection screen that follows begins listing. (partial name is OK)
5. C=List, T=List Counties = Key a ‘T’ for city. Press <Enter>

 

If you chose entire State (Canada explained later in this section), a screen similar to this one appears.

 

 

Complete this screen as follows:
1. Comment (User Reference Only) = Key any note for your own purpose (not used by system)
2. Exempt Code = blank, C, or B. Code usage explained on screen sample.
In the example above, product X2-887 is exempted from state level taxation in Alabama but is subject to all local taxes.
If you wish to exempt this same product in other states, press F6.

 

If you pressed F6 to copy exemptions to another state, a screen similar to the following appears:

 

 

If you wish to copy this exemption to another state, key the State Code in the appropriate field and press <Enter>. The program creates the exemption in the original state you chose and the additional one you keyed on this screen.
If you wish to copy this exemption to all states, District of Columbia and Puerto Rico, place a ‘Y’ in the appropriate field and press <Enter>. The program creates the exemption in the original state you chose plus all other states and territories in the US.

 

If you chose Canada a screen similar to this one appears.

 

 

Complete this screen as follows:
1. Comment (User Reference Only) = Key any note for your own purpose (not used by system)
2. Exempt Code = blank, C, or B. Code usage explained on screen sample.
In the example above, product X2-887 is exempted from Canada GST taxation.
If you wish to exempt this same product in other states, press F6 and follow the instructions on the previous pages.

 

If you chose county level exemptions (C=List, T=List Counties = C) and you provide a state code of AL and beginning county name of MOBILE, a screen similar to this one appears:

 

 

Complete this screen as follows:
1. Comment (User Reference Only) = Key any note for your own purpose (not used by system)
2. Exempt Code = X, C, or B. Code usage explained on screen sample.
You can place the exempt code next to any or all listed counties. When <Enter> is pressed, your choices are stored and the next county names in alphabetic sequence are displayed for your action.
In the above example, product X2-887 is exempted in Mobile County. This product is taxed at state level and county level for all other counties in the state. City taxation occurs for all cities in Alabama including those in Mobile County.

 

If you chose city level exemptions (C=List, T=List Counties = T) and you provide a state code of AL and beginning city name of BIRMINGHAM, a screen similar to this one appears:

 

 

Complete this screen as follows:
1. Comment (User Reference Only )= Key any note for your own purpose (not used by system)
2. Exempt Code = X, C, or B. Code usage explained on screen sample.
You can place the exempt code next to any or all listed cities. When <Enter> is pressed, your choices are stored and the next city names are displayed in alphabetic sequence for your action.
In the above example, product X2-887 is exempted in the cities of BIRMINGHAM in JEFFERSON CO, BLOUNTSVILLE, and BOAZ in ETOWAH CO. This product is taxed at state level and county level for all counties in the state. City taxation occurs for all cities in Alabama except those chosen above.

 

 

 

 

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