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If a Vendor is setup to be tax-liable, is it possible to also have tax-not liable invoices for the same vendor?
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hi, first step is to define your General business posting groups, for example "NAT = National customers and vendors", follow define and create your Gen. product posting groups, for example "FP = Finisheds products" and IP = Intermediate products". Is important also, to define your Tax posting setup doing de same way you did with general posting groups, creating a Tax business posting group "NAT = National customers and vendors" where you assign the percent you should applied to this group, and create your Tax product posting group, for example "EXP = Exemption" whit 0% and "TXB = Taxable", then you'll be able to combine both.
Next step, is to configurate your vendor card whit your General business posting group "NAT", and Tax Bus. posting group "TXB", here you can also define an specific Vendor posting group handling directly an exepmtion for all vendors entries.
Next, go to configurate your product card, here you assign the General product posting group "FP" or "IP" and your VAT Prod. posting group "EXP" or "TXB".
Now you can purchase an not taxable item to your "Tax liable vendor", remember the final taxable entries are registred once the purchese invoice is paid and applied.
Specifically, how would you set up posting groups to handle this?
We have vendors that sell us product that we incorporate into finished product for resale. These same vendors sell us supplies (taxable). How would we set up posting groups so that the purchase orders created would exempt specific items from taxation, and make other specific items (or all other items not excluded?) taxable?
Yes, it is possible in many scenario and system is capable fo handling such scenarios.
Are you facing any typical issue in your case?
Yes, you can achieve it either via setup, to have a separate setup of tax non-liable item or service that by intersecting with a setup of posting group of this vendor would result in tax non-liable setup. Or, if this is happening very rarely, you can manually change the default posting groups directly in the unposted document before the posting by selecting different ones to make it different from default.
yes you can, even your vendor has been set up as tax liable, ...just make sure you'd purchase a free tax item, fixed asset or G/L account.
General business and product posting groups most be defined whit their G/L accounts to avoid error while purchase order is being posted
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