1. For our customers working in Kansas and some other Midwest states, the sales tax laws consider the construction/service company as the end consumer. The state will not allow customers to purchase materials pre-tax. If the construction/service company incorporates the material into a taxable sale, then the customer can take a credit for the tax paid on the material because they have charged their customer sales tax. Consequently, most construction/service companies, want to treat sales tax as part of the cost of the material. Yes, this means the state receives more revenue than what they are entitled to collect however, a large number of customers don’t want to be burdened with tracking actual tax paid to vendors.
2. I did some testing with the sample data and it seems the only outcome of the setting “Include prorated tax on work order item costs” is to show sales tax paid as a cost on the work order for profitability reporting. Practical application of the SM workflow has shown, most customers receive SM PO’s from the AP Invoice, not a related packing slip or other receiving documents. Most packing slips do not reflect pricing and other information customers want to verify with the PO amounts.

by: Kris L. | over a year ago | 3 Service Management