Distribution, Manufacturing, and Internet Modules

[jatses]

How does MAS round its Sales Tax calculations? Sometimes I get 11.4338 and it rounds up to 11.44 and other times I get 11.0578 and it rounds down to 11.05. The thing I've noticed is that it is never consistent.

FYI, this for submitting Sales Order through Web Services (PHP). I want to make sure the amount I show the user is the same across the board.

Thank you,

[TomTarget]

Any possibility you have a multi-tiered sales tax?   In other words you have a state level tax and a local tax which are added together..

If so I'm betting that you are getting rounding at each level.   After the items have been added together you could get what appears to be rounding inconsistencies compared to using a total rate.

For example:

Assume state tax rate of 5% and a local rate of 1.1%

Sale of $636.11

Calculating taxes separately:

State    31.8055   rounds to 31.81

Local    6.99721 rounds to 7.00

Total is $38.81

Calculating taxes at total rate of 6.1%

Tax is 38.80217 rounds to 38.80.

I'm assuming that MAS calculates separately with rounding and adds them together which would give the appearance of rounding up using the total tax rate.

[jatses]

Thomas,

Thank you for the explanation. However, we do not use a multi-tiered sales tax. It's a flat rate for the state (IN, MI). I'd ask our master developer what the algorithm looks like within MAS, but spending several hundred dollars on a "penny" matter seems quite fruitless.

Thanks again,

[TomTarget]

I would concur that it's not worth spending a lot to track down fraction of a cent rounding.

However,  now you're going to drive me nuts watching for this as I have never noticed a rounding issue on a single tier (probably because everything in Washington is multi-tiered).

[SPyle]

It might be interesting to calculate a couple of the orders on a line-item basis rather than a total basis.  It follows Tom's logic, but if you have a lot of lines, it can easily become more than just one penny.  Are most of your order 3 or 4 lines, or many lines?

[jatses · Accepted solution]

Steve and Thomas,

You both were on the right track, but Steve, your idea got me thinking. So, I ran through a few of my test orders with the problem and figured out what it was. MAS totals the line items in either a Taxable Amount or Non-Taxable Amount. If Taxable, it calculates the applicable sales tax and rounds accordingly. Then, if there is a Freight Amount, it calculates the sales tax separately and rounds accordingly. So far it's a 100% fix on all the test orders I had the penny problem with. I'll report back if it's still happening after I tweak my algorithm..

Thanks for all your assistance,

[TomTarget]

So it appears that the calc is done  (taxable * rate)  + (freight * rate)  instead of    (taxable + freight) * rate.

!!! Brainstorm!!!   The setup for taxes can have different rates for the sales tax vs freight!   That's why it calculates them separately.

[jatses]

Thomas,

I'm relatively new to corporate financials, but why would there be a different tax rate on freight charges? I've never heard of that or even seen it applied anywhere.

[DFeller]

Because someday, perhaps, maybe, the government in some state might think it would be a great idea to tax freight at a different rate than regular line items.  At least then MAS is flexible to accomodate that.

Just think about the Employee/Employer tax rate of 6.2 versus 4.2 percent.  Since MAS had those rates as separate figures, even though they were the same, there was flexibility to change it to accomodate a government's whim.  BusinessWorks, a lower end product, had just ONE rate and therefore wasn't flexible enough.

Dawn

[TomTarget]

Don't quote me on this,  but I'm right on the Washington/Idaho border and as I recall in one state,  freight is not taxable at all and in the other it is taxable.   I don't remember which is which off the top of my head.  Effectively a rate of 0 for one state and 8.x in the other.

It would not surprise me that there are currently some states with differential rates.   From time to time I've seen some really strange ways of doing things.  Seems like I remember some state where there was a maximum amount of sales tax on a sale.  For example the rate was 5%,  but the total tax could not be more than $2,000.   Don't you just love our politicians who do this kind of stuff to us?

Now if we can get them to make our FICA rate the same rate for the entire year (or at least for an entire quarter).   Two months?  Obviously none of them are accountants and realize what they are doing to us.