PO is created.

Here, I have a tax rate defaulting as 10%. I would like to default a different rate.
Here is the initial setup. Above.

First, create the new rate which you are going to default. Apply.

Rates are also tax classification codes.

Next, check the application tax options for Purchasing – make sure that ship to location is being utilized
for defaulting the tax classification code. (Conditional setup – not required)

Now, create tax determining factor set. Determining factor and determining factor name are all that are
required. Also Give it a name and label.

Create the tax condition set – and reference the newly created determining factor set.

Choose Continue
Choose the rate that was created earlier. And choose Finish.

Choose expert rule entry next to Determine tax rate – far right.
Enter rule code and name of choice. Choose tax status code and then choose the determining factor set
we had created earlier.

Choose Next.

Choose the tax condition set – and then choose the resulting tax rate you would like to apply.

This screen shows the logic – so if tax classification code is MF COL 8% then use the rate of MF COL 8%.
Give the rule order and don’t forget to check enable. Finish.

Now, if this tax meets the conditions and is considered – then by default it would use a 10% rate, but if
the tax classification code is passed as MF COL 8% - then its going to use 8% rate.
You can actually test the rule – by querying back the PO – then manage tax – then choose additional
information.

Here, you can put in the tax classification code manually – and choose apply.

Notice that the rate is now 8%. That is user entered – manual.
However we set up the tax options for purchasing to look at the ship to.

Under setup/organizations/locations – there is a tax code.

This is really tax classification code – although it just says tax code.

Put in the default tax classification code.

Create a new PO – and then save. Upon saving its going to check application tax options then use the
tax classification code on the ship to – pass that to eb tax – and the rule is then going to be used which
pulls the rate of 8%.
Here is the result of the new PO.

And the new tax classification code defaulted from the DENVER location.
It is also possible to create a rule – under determine tax applicability. The same logic could be used. For
example, you could create a rate of 0 that is titled NOT APPLICABLE. Then create your determining
factor set and condition set to use that parameter. Then setup the tax rule on determine tax
applicability – and when the tax classification code is NOT APPLICABLE – then the tax is Not Applicable.

I am showing above – the not applicable. So if I were to continue with this rule – if the tax class
defaulted in as MF COL 8% - the tax would be not applicable – so this tax would not even be used.
Note, MF COL 8% does not really have a proper name of being not applicable – so that’s why I was
saying to create a new tax rate – such as NOT APPLICABLE – to be used.
The tax classification code drops in from supplier/location/item – etc..

For item its call input tax classification code- under purchasing. Don’t forget to update the purchasing
options in the tax module – to tell it to pull from the item, as we did earlier.