How to test an exempt transaction with the tax calculator (New GTD Cloud)

As explained in this article, you can use the tax calculator to check if a customer’s exemption would be applied in a specific transaction.

The following example is a transaction with a customer who has an exemption for the Entity/Use Code Resale in the state of Massachusetts. When you're running your own test transaction, enter your organization’s transaction details instead of the ones you see in this example.

 

Running a control transaction

First you need to run a normal transaction to see what the standard tax rate is without any exemptions.

  1. Log in to New GTD Cloud and go to the Tax Calculator.
    taxcalculatortab.png
  2. Leave the default values in Document-level settings.
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  3. In Locations, select Ship To for Location 1, then fill in the address.
  4. Click Add another location, then select Ship From for Location 2 and fill in the address. For more information on what kind of location information you should provide, read this article.
  5. In Line item settings, select the payment type and transaction type or leave the default settings, Debit and Sale.
  6. In the Line Items section, enter the Gross Amount and leave the other fields blank.
  7. Click Calculate Tax.
  8. In the Results panel, the tax amount for this example is $6.25. Make a note of the tax amount, then close the slide-out panel by clicking the Close (X) button in the upper right corner of the screen.

 

Applying the exemption

Now that you know what the tax amount would be without exemptions, you can apply the exemption and see if the tax amount changes.

  1. Leave all the values in the fields and scroll down to the Line Items section.
  2. Click on the magnifying glass icon in the Entity/Use Code field.
  3. In the slide-out panel, select the Entity/Use Code mapping you need. In this case, we're using RESA - Resale Certificate.
  4. Click Apply.
  5. The Entity/Use Code field on the main screen will be populated with the Resale MyEntity/Use Code that was previously mapped to the RESA - Resale Certificate Entity/Use Code.
  6. Click the plus (+) icon next to the Entity/Use Code field, then select Customer / Vendor from the options.
  7. In the Customer / Vendor section, select the Customer button, then begin typing the customer’s name until the full customer name appears in the dropdown menu.
  8. Click the customer’s name, then click Calculate Tax.
  9. In the Results panel, you can see that in this example, the exemption was applied and the customer wasn’t charged any tax. This means that if a real transaction with these exact details is passed into Global Tax Determination from the ERP, this customer won’t be charged any tax.