When you setup Vertex, you have configured all of the relevant states and added all customer tax exempt details. The customer tax details do not exist in the system, but you expect that this is not required since the integration will determine the taxability based on the settings in Vertex.
Also, you have a rule defined in External Tax Determination. The tax determination rule is only intended to force the US Tax Country on the sales order or customer invoice. Through external tax event determination, tax event is enforced as 310.
However, the system is still charging sales tax on an invoice even though the customer is defined in Vertex as non-taxable.
SAP Business ByDesign
Reproducing the Issue
- Go to the Customer Invoicing Work Center
- Create a new Manual Invoice Request with the necessary data maintained
- Navigate to Items tab, Taxes sub tab
- You can see tax rate is 0%.
- But if you click "Save as Invoice" or " Release" button, the tax will be charged
- In the created Customer Invoice ABC (where ABC represents the Customer Invoice ID)
- Click on Edit and View All button
- Navigate to Items tab
- Select the Taxes sub tab, you can see Tax Country/Region is US - United States, External Tax Rate Determination is checked
The Combination of External Tax Determination Configuration with Vertex/Avalara Integration is Not Supported.
This is the current system design.
You can change the required tax codes manually or use Vertex or Avalara Integration without external tax determination.
If you want the feature to be supported, in order for you to directly get in contact with the decision makers in SAP Product Management, please submit your enhancement request via the following SAP Continuous Influence sites:
Customer Invoice; Vertex; Avalara; External Tax Determination; Combination , KBA , AP-TTE-TC , Tax Calculation , Problem