We are looking at going live soon with an entity in US and weeks before GO live we have stumbled upon quite a big bug regarding sales tax in 22R1. We use the standard/out of the box integration with Vertex O Series to get the applicable tax amount and percentage for the products we sell.

It's often the case in some US states that for some products only 80% of the net amount will be considered as taxable. The information about tax % and tax amount and taxable amount is coming from Vertex via standard interface.

The issue is that in Customer Order the tax amounts are correct (header and lines), but when the invoice is created, the system recalculates the Gross Amount and Tax Amount at Invoice Header level based on tax percentages coming from Vertex, but it considers the whole net amount as taxable -> thus creating wrong postings in Accounting for IP2 and IP4.

It’s hard to believe no other US customer came across this issue and it’s still an issue in 22R1.

HAs anyone else faced the same issue? This has been reported to R&D, but I’m curios if there’s any workaround for this? Maybe manual vouchers to reduce the VAT and Gross Revenue amounts? I’m not even sure if this would be a legal practice.

I’ve attached below the analysis on this one.