Luxury Taxes
Luxury taxes are assessed only on transaction amounts that exceed a specified minimum. For example, a 30% luxury tax may apply only to automobiles costing more than $30,000.
Two settings in Tax Rate Maintenance govern setup of luxury taxes.
Minimum Taxable Amount
This setting identifies the minimum amount subject to tax. In the above example, Min. Taxable is $30,000.
Tax Method
For luxury taxes, set Tax Method to 02. Whenever the transaction taxable base amount is less than the Min. Taxable amount for the tax rate, the final tax amount is zero.