Maybe this will help clarify things.
In Business Central, the Use Tax vs. Expensed Tax behavior is defined at the Tax Group Code level, not separately per Tax Jurisdiction. This means:
> You cannot split Use Tax and Expensed Tax by jurisdiction within the same Tax Group Code in a single Tax Area.
So in your scenario — trying to have STN-LOCA apply Use Tax for one jurisdiction and Expensed Tax for the other — is not supported in standard BC.
Workaround:
To achieve this logic, you would need to:
1. Create separate Tax Group Codes for each variation — e.g., one that is Use Tax only, and another that is Expensed.
2. Adjust the Tax Area and Tax Details to reflect the correct treatment per jurisdiction using those different group codes.
3. On the document line, apply the correct Tax Group Code based on which vendor/tax scenario applies.
This does make the setup more complex, but it is the only way to control tax treatment per jurisdiction.
Reference:
https://learn.microsoft.com/en-us/dynamics365/business-central/finance-sales-tax
https://learn.microsoft.com/en-us/dynamics365/business-central/finance-how-set-up-tax
Mark this as the verified answer if it helps. Let me know if you’d like an example configuration.
