Creating a Customer Credit Memo for Sales Tax only

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Posted on by Community Member Microsoft Employee

First our version is Nav 2013 R2.

We have a scenario where we have charged sales tax to a customer and then received the tax exemption certificate from the customer. The invoice has been paid except for the sales tax amount which is still on the customer account. We have done a work-around for this but doesn't really seem to work very well when trying to create reports. The way we have managed this is to create a resource for each state called SALESTAXONLYXX, XX being the state. Then we have created a gen. product posting group for each state and set this up in the posting set-up to map to the GL. When creating the Credit Memo, the resource for that state is used and the amount of tax is credited on the line along with the Tax Area Code. The resource is setup with a Tax Group Code of Non-Taxable. This relieves the balance on the customer account and hits the GL in the correct account number but creates havoc for my Jet Report.

Does anyone have a better solution for this problem? Does anyone else have this problem?

Thanks,

Sue Ann

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Community Member Microsoft Employee on at

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RE: Creating a Customer Credit Memo for Sales Tax only

have you tried a direct entry through General journal?
Community Member Microsoft Employee on at

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RE: Creating a Customer Credit Memo for Sales Tax only

The only outstanding amount for these invoices is the tax amount. There is no other amount to credit.
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Community Member Microsoft Employee on at

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RE: Creating a Customer Credit Memo for Sales Tax only

You may look for the possibilities of reversing the entire Invoice via Credit memo and then pass the fresh invoice (W/O Tax).
Community Member Microsoft Employee on at

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RE: Creating a Customer Credit Memo for Sales Tax only

Thank you for your response. This would work if we didn't have to report sales tax by area code. When creating a credit memo as suggested, the area code does not pass to the G/L account even when including it on the CM. Also, in reporting our sales tax, the gross amount of invoice must be reported along with the credited tax. I have created a jet report that will give us this information but we were hoping that this could all be done with just one credit memo.
Community Member Microsoft Employee on at

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RE: Creating a Customer Credit Memo for Sales Tax only

i've tested your solution following the next steps:

1. go to your Chart of Accounts (16) and be sure your vat charged account is set exempt of tax

2. create a new sales credit memo and complete the general information.

3. in your sales line select G/L Account type, and entry your vat charged account. Consider you can change description to identify clearly your entry, then entry 1 in quantity whit the unit of measure you use for this cases, after entry your tax amount and post your credit memo.

4. finaly, check your customer and general ledger entries in order to be sure all is ok

i hope it will be useful

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