Taxing – Rules and Results:
 
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Tax Rates:

•	Six (6) tax rates are allowed  (0-5):

Tax rates are global (set for a network).  Rates are stored in the system database and loaded to all entry terminals.  Use FDNDC to set tax rate table.  A tax rate of 7.25% would be set as 725 in the tax table.
 
Tax Cautions:

•	Tax codes and reporting:

Taxing can be very complex and to make reporting consistent, all items (PLUs) should have tax codes set.  Even if items have the tax within the sales price, the ADD VALUE TAX report requires tax codes and rates to unravel tax shifting that can occur.  Use of *NTx and *ATx (not tax and tax all) functions set tax codes to help in producing correct reporting and giving accurate computations for the customer charges.  

Tax Switching (By terminal):

Each terminal has a table that allows crossing tax rates.  Because tax codes are set on sales item records (PLU records), the location of a sale may require switching the tax code.  An example is liquor sold at a bar location versus liquor sold in a dining area.  The bar liquor may not be taxed but the same item sold in the dining area will be taxed; thus, switching the tax pointers based on entry terminal location is required.

Tax pointers (0), (4), and (5) are not switched by terminal.  Pointers (1), (2), and (3) can be switched by terminal.

Tax Switching (By Sales group):

•	Some States require taxation be charged based on the method or combination of sales items.  For example, liquor sold at a bar will include the tax in the price while liquor sold in a dining area (where food items are sold) will have tax added to the sales price.  A tax SWITCH is provided to accommodate this taxation based on food group and location.  This tax switch is set on screen (PSTL1) and is set per terminal.

Example:  Tax Switch set to (1)

#1                                                    Terminal #5      Rate
       1  Beer  @ $1.50    Tax  0.00     Tax 2 -> 2         2 = 0%
                 Sale   1.50
#2                                                    Terminal #5      Rate
       1  Beer  @ $1.50    Tax  0.15     Tax 2 -> 1         2 = 0%
       1  Cake @ $2.00    Tax  0.20     Tax 1 -> 1         1 = 10%
                  Sale  3.50 + 0.35  = 3.85

In the example #2, tax on the beer is switched to code (1) when the beer is sold in combination with the cake.  In example #1, the beer tax is included in the $1.50 price (termed add valorem).  The proprietor is obligated to remit the add tax, though not collected from the customer.  The equation for add valorem tax is:

               Tax  = Value * Rate
               Tax  =  Sold  - Value
Substituting
               Tax  =  Sold  - Tax/Rate
               Tax + Tax/Rate = Sold
               Rate(Tax + Tax/Rate) = Sold * Rate
               Tax (1 + Rate) = Sold * Rate
               Tax = (Sold * Rate) / (1 + Rate)

Using the example of selling a beer:

              Tax = (1.50 + .10) / (1.0 + 0.10)
              Tax = 0.15 / 1.10 = 0.136