Hospitality: Delivery Order Tax

In a North America hospitality environment, delivery orders must be taxed based on the destination: either the customer's address or the store's default tax area. The NA localization handles this automatically when a delivery order is created at the POS.

How Tax Is Assigned to a Delivery Order

When a delivery order is created, the system determines the tax settings in this order:

  1. Customer is specified: the tax area code and tax liability are taken from the Customer Card (Invoicing FastTab). This reflects the tax rules for the customer's billing or delivery address.
  2. No customer is specified: the tax area code and tax liability are taken from the Store Card. This applies the store's default tax settings to the delivery.

This means:

  • Deliveries to a tax-exempt customer (Tax Liable = false on the Customer Card) are not taxed, even if the store is tax-liable.
  • Deliveries to a customer in a different tax jurisdiction use that jurisdiction's rate, not the store's rate.

Setup Requirements

For delivery order tax to work correctly, ensure the following are configured:

Customer Card

Field Location Value
Tax Area Code Invoicing FastTab The customer's tax jurisdiction
Tax Liable Invoicing FastTab Enabled for taxable customers; disabled for exempt customers

Store Card

Field Location Value
Tax Area Code (LSCNA) Statement/Closing FastTab The store's default tax jurisdiction
Tax Liable (LSCNA) Statement/Closing FastTab Enabled for standard stores

Items

Each item on the delivery order must have a Tax Group Code set (Item Card, Invoicing FastTab) so that the correct tax rate is applied.

Delivery Order Workflow

  1. At the POS, initiate a delivery order.
  2. If a customer is linked to the order, the system reads the customer's Tax Area Code and Tax Liable settings.
  3. If no customer is linked, the system uses the store's Tax Area Code and Tax Liable settings.
  4. Tax is calculated on each order line using:
    • The resolved Tax Area Code (from customer or store).
    • The item's Tax Group Code.
    • The applicable tax rate for that Area + Group combination.
  5. The total tax is shown in the transaction summary before the order is confirmed.

Tax by InfoCode

For delivery orders, the system sets an internal flag (referred to as VAT by InfoCode in the base application) to true. This ensures that sales tax is calculated at the point of order placement using the address or customer context, and is not recalculated later.

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