Tax juridication US

[FabienTC]

Hello everyone,

It was my understanding that SAP was supposed to manage all tax related activities (set up rate, juridiction and so on).

We activated US on our SAP S/4HANA Cloud Public Edition Finance  tenant and started to setup a US company.

However, the only tax juridiction we have on the dev tenant is "7700000000 : Non-Taxable" while the starter tenant has the different region (Alabama, Alaska...).

Are we supposed to fill them ? 

thanks,

Best

[AlterEgo]

If you are using SAP directly to calculate your tax jurisdictions, yes, You will have to manually adding all the jurisdictions needed (for each state and combination of County, district, parish, etc). That is why most of the companies use a 3rd party software which already provide all these possibilities. These software are usually Taxware or Vertex. I have used both. These provide all the jurisdictions and maintain all the rates when these changes. Again if you do not go the 3rd party route you will have to first create all the jurisdictions but going forward also maintained them. Also keep in mind that the jurisdiction follow the United Postal Service routes, SO when the USPS change their route zip codes also the tax jurisdiction will change and the address in your Customer, Vendor, Cost Center, Plants, Company Codes (all relevant for Indirect tax calculation) will have to be adjusted. So think about all this before take a decision. Maybe for a small company which has same designated locations the self maintenance will work BUT for big companies which their sales can happen all over the United States, the maintenance and keep up can become a difficult tax which might require a team in itself to keep up

[AlterEgo]

If you are using SAP directly to calculate your tax jurisdictions, yes, You will have to manually adding all the jurisdictions needed (for each state and combination of County, district, parish, etc). That is why most of the companies use a 3rd party software which already provide all these possibilities. These software are usually Taxware or Vertex. I have used both. These provide all the jurisdictions and maintain all the rates when these changes. Again if you do not go the 3rd party route you will have to first create all the jurisdictions but going forward also maintained them. Also keep in mind that the jurisdiction follow the United Postal Service routes, SO when the USPS change their route zip codes also the tax jurisdiction will change and the address in your Customer, Vendor, Cost Center, Plants, Company Codes (all relevant for Indirect tax calculation) will have to be adjusted. So think about all this before take a decision. Maybe for a small company which has same designated locations the self maintenance will work BUT for big companies which their sales can happen all over the United States, the maintenance and keep up can become a difficult tax which might require a team in itself to keep up

[Yanica]

Hello,

The tax jurisdiction codes, and related tax rates must be created in the system. I am attaching the Setup of Internal Jurisdictions accelerator. 

Please follow the link for instructions how to configure the Tax Solution for US as part of the Roadmap Viewer and follow the Setup of Internal Jurisdictions accelerator:

Roadmap Viewer (sap.com)

1. Setup of Internal Tax Jurisdictions (accelerator available)

2. Transport the change project to the P-System

3. Activate the Tax Jurisdiction in the P-System via the Import Tax Codes after Transport app

Regards,

Yanica