Self-Assessment of Taxes
The following section discusses how the Sales and Use Tax Interface (SUTI), the QAD ERP application, and Quantum for Sales and Use Tax handle self-assessment of taxes in QAD ERP applications.
The following subsections discuss situations in which self-assessment of taxes may be required—internal inventory consumption, service contracts—and calculating those taxes.
Internal Consumption of Inventory
Items originally purchased for inventory, either to be used to produce products for resale or to be sold alone, are typically not taxed. However, if such items are later issued from inventory for internal consumption, tax is typically owed.
Example: Items are issued from inventory for a research and development project or for maintenance of equipment.
The QAD ERP application and Quantum Returns provide features that enable you to accumulate and post self-assessed consumer use taxes on a periodic basis. The following procedures are recommended:
• Use a unique GL account for all self-assessment transactions so that transaction records can be identified and accumulated periodically by account, site, transaction type, date, and so on.
You may want to use unique accounts to distinguish groups of transactions, for example, consumer use transactions versus seller use transactions. You can designate GL accounts for unplanned issue, unplanned receipt, and inventory transfer transactions in the QAD ERP application.
• Use the Remarks field (tr_remark) in inventory transactions. You can set up generalized codes for this field, establishing unique values to further distinguish groups of transactions. Unplanned issue, unplanned receipt, and inventory transfer transactions all have this capability in the QAD ERP application.
Remarks are not included in the selection criteria for QAD transaction history reports, but do display in these reports.
• Use the Order field in inventory transactions. For example, specifying SELFASSESS in this field for every self-assessment transaction lets you use the Transactions by Order Report (3.21.13) to review transactions grouped by this order value.
Note: Transactions by Order Report does not display currency totals.
You can use unique order values to identify groups of transactions; for example, consumer use transactions versus seller use transactions.
Unplanned issue, unplanned receipt, and inventory transfer transactions all let you specify order values.
• Use the Transactions Accounting Report (3.21.16). If you use different accounts to track inventory transactions that need to be self-assessed, you can use this report to track those transactions.
This report provides totals by account. Selection criteria include:
• Transaction effective date
• GL reference
• Account, sub-account, and cost center
• Project code
• Transaction processing date
• Transaction type