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Tax groups

Business Central uses tax groups to set the taxability of items and resources. TaxRateCentral adds a Taxable flag to each tax group and an override for each state. The app uses these values when it creates the tax details during rate processing.

Open the Tax Groups page from the Tax Groups action on the TaxRateCentral Setup Card.

Note. Create at least one tax group before you load states or process rates. The app stops with the error Tax Group not found. when no tax group exists.

Taxable

Turn on Taxable for each tax group that is taxable in most states.

When the app processes a state, it creates a tax detail for each tax group:

  • For a taxable group, the tax detail gets the rate from the service.
  • For a group that is not taxable, the tax detail gets a rate of 0.

Override the taxability for a state

An item can be taxable in one state and not taxable in another. Use a state override for this case.

  1. On the Tax Groups page, select the tax group.
  2. Choose Tax Group States. The TaxRateCentral State Tax Groups page opens.
  3. Choose Edit List.
  4. Add a line for the state.
  5. Set Taxable for that state.
  6. Optional: enter a Tax Basis Adjustment %.
Field What it does
State The state of the override
Taxable The taxability of the tax group in this state. It replaces the Taxable value of the tax group
Tax Basis Adjustment % The percentage of the line amount that is taxable in this state. For example, enter 60 to calculate the tax on 60 percent of the amount. Enter 0 to use the full amount

The Tax Basis Adjustment % applies to sales documents. The app uses the Ship-to County of the document to find the state.

Changes do not update existing tax details

When you change Taxable, the app asks you to confirm the change. The change does not update the tax details that exist. It applies to the next rate processing for the tax group.

To apply a change now, process the affected states again. See States and rate updates.

The Tax Groups page with the Taxable column that TaxRateCentral adds Figure: tax groups with the Taxable flag.

The TaxRateCentral State Tax Groups page with overrides for MA and NY Figure: state overrides for one tax group.