Possible Reasons for Sales Tax Calculation Failure
Question
A customer uses the sales tax functionality in Dynamics 365 Finance.
The customer reports that when a sales order is created, sales tax does not calculate on the line.
You need to determine why sales tax is not calculated.
What are two possible reasons? Each correct answer presents a complete solution.
NOTE: Each correct selection is worth one point.
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D. E.AE.
https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/indirect-taxes-overview https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/tasks/set-up-sales-tax-groups-item-sales-tax-groupsThe issue reported by the customer is that the sales tax is not calculating on the sales order line in Dynamics 365 Finance. To determine the possible reasons for this issue, we can analyze the various tax-related setup options in the system.
A. The first possible reason for the sales tax not calculating could be that the sales tax group is populated on the line, but the item sales tax group is missing. In Dynamics 365 Finance, sales tax can be calculated based on the sales tax group associated with the customer or the item sales tax group associated with the product. If the sales tax group is associated with the customer, then it will be applied to all the items on the order line. If the item sales tax group is associated with the product, then it will be applied only to that product. Therefore, if the item sales tax group is missing, the sales tax will not calculate on the line.
B. The second possible reason could be that the sales tax settlement account is not configured correctly. In Dynamics 365 Finance, the sales tax settlement account is the account where the sales tax collected from customers is recorded. If this account is not set up or configured incorrectly, the sales tax calculation may not work as expected.
C. The third possible reason could be that the sales tax authority is not set up for the correct jurisdiction. In Dynamics 365 Finance, the sales tax authority represents the tax authority responsible for collecting and enforcing sales tax in a specific region or jurisdiction. If the sales tax authority is not set up correctly, the sales tax calculation may not work as expected.
D. The fourth possible reason could be that the sales tax code and item sales tax code are selected, but the sales tax group is not associated with both codes. In Dynamics 365 Finance, a sales tax code is used to define the tax rate for a specific jurisdiction, while an item sales tax code is used to define the tax rate for a specific item. If the sales tax group is not associated with both codes, the sales tax calculation may not work as expected.
E. The fifth possible reason could be that the sales tax group and item sales tax group are selected, but the sales tax code is not associated with both groups. In Dynamics 365 Finance, the sales tax group and item sales tax group are used to determine the tax rate to apply to an order or item. If the sales tax code is not associated with both groups, the sales tax calculation may not work as expected.
In summary, the possible reasons for the sales tax not calculating on the sales order line in Dynamics 365 Finance could be missing item sales tax group, incorrect sales tax settlement account configuration, incorrect sales tax authority setup, missing association between sales tax group and codes, or missing association between sales tax code and groups.
