SAP Knowledge Base Article - Public

3761709 - Error 'Tax calculation cannot be determined. Zip is not valid for the state' when changing the ship-to address in SAP S/4HANA Cloud Public Edition

Symptom

  • In the Manage Service Contracts app, when attempting to change the address of involved parties, error message FS861 is displayed: "Item XX: Error in external tax system: Tax calculation cannot be determined. Zip is not valid for the state."
  • After changing the ship-to party address at the header level in a service contract, the tax rate becomes zero in the item price details. 

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Environment

SAP S/4HANA Cloud Public Edition.

Reproducing the Issue

  1. Open the Manage Service Contracts app and display an existing service contract.
  2. In the Partner Involved tab, change the ship-to party address. Encounter error "Item XX: Error in external tax system: Tax calculation cannot be determined. Zip is not valid for the state."
  3. Save the change. Return to Items > Price Details and observe that the tax condition value is zero.

Cause

The external tax system returns an error when the ZIP code used in the ship-to address does not match the state where the address is located. As a result, tax cannot be determined and the tax condition appears as zero.

Resolution

  1. In the Manage Business Partner app, check the Address tab of the relevant business partner, verify that the ship-to address has a valid ZIP and state combination according to postal standards.
  2. In the Manage Service Contracts app, correct the ship-to address so that the ZIP matches the state.
  3. Save the contract and verify that the tax rate has been correctly determined.

See Also

  • SAP Note: 3549847 - 503: 'Tax calculation cannot be determined. Zip is not valid for the state.'
  • KBA 3736615 - How tax classification is determined in service contracts

Keywords

service contract, ship-to address change, tax determination, tax zero, external tax, tax interface usa, zip invalid for state, repricing, tax jurisdiction, price details, utxd, utxe, ship-to partner, address validation, tax error , KBA , XX-PART-TIF , Tax Interface (USA) , Problem

Product

SAP S/4HANA Cloud Public Edition all versions