Tax handling in AP Automation

For companies that use the Tax application, AI/ML populates tax information on a draft bill when the predicted location has an assigned Tax solution. For these bills, Intacct automatically selects Transaction has tax implications and populates the remaining tax fields as described here.

For companies that do not use the Tax application, tax details generally populate as a separate line on the transaction.

Inclusive taxes

Inclusive taxes is set based on the previous bill for this vendor. If the last bill used inclusive taxes, this field is selected. Otherwise, it's left deselected.

Entries

AI/ML populates tax information based on your settings for how AP Automation should generate the bill.

Where AI/ML provides tax amounts

Setting

AI/ML provides

A single line item that summarizes the total

Transaction tax total

All line items and associated amounts

Transaction tax for individual line items.

For bills generated with all line items and associated amounts, Transaction tax is not populated for any of the lines in the following circumstances:

  • A non-standard tax rate is used

    For example, custom tax rates and negative tax rates are non-standard.

  • Multiple tax rates are applied in the same bill

    For example, the vendor document shows different tax rates applied to lines, or it shows multiple tax rates applied to a single line.

  • Tax rates are not applied uniformly to all lines

    For example, a single tax rate of 20% is used, but it's only applied to some of the line items.

Reviewing tax information before posting

Always review the tax portion before posting a bill.

AP Automation can create draft bills without all the required fields. Before posting, you must manually update the bill with tax details and any other omitted required fields.

If a tax amount is present but the tax detail is empty in a draft bill, Sage Intacct assumes that it needs to preserve the tax amount that came from AP Automation. Because of this, Intacct does not recalculate tax when a new tax detail is entered for the first time.

You can enter a tax detail and then change it to trigger the tax recalculation. After the first time a tax detail is selected, any subsequent tax detail change will cause the taxes to recalculate. This is the default behavior for all subledger transactions.

Edit the draft before posting to add tax details and make any necessary corrections.