Tiered Tax System

A tiered tax system is used to calculate Local (State/Municipal/ City) Sales or Use Taxes that may occur at customer sites with multiple points, or tiers, of taxation.

By configuring Tax 3 and Tax 4 codes you can apply taxation using very specific rules that can apply to each piece sold (Line Item Unit Price), the total number of pieces sold (Line Item Extended), or the total value of all items on an invoice (Invoice).

Once the application level is set, when the tax code is applied you can set the maximum amount of tax that can be applied (Maximum Tax) and the sale amount window (From/To) that will have tax applied to it.

This system was created to support tax laws in certain states (e.g. Tennessee) where state and local taxes have been harmonized on the sales of certain goods and services, but only to certain maximum tax amounts or on certain sale over and above a given invoice value.

It is not recommended that you would use Tax 3 and Tax 4 in this manner unless you know that similar laws are at work in your state or municipality.