Tax

In this article

United States

Canada

LS Central supports sales tax calculation for North America, covering the United States and Canada. Each country has distinct tax rules. LS Central applies tax accurately based on the store's location, the customer's address, and the product's tax category, using Tax Areas, Tax Groups, and Tax Jurisdictions configured in Business Central.

United States

In the US, sales tax is determined at multiple levels: state, county, and city. There is no federal sales tax; rates and rules differ by jurisdiction and can vary significantly across locations. LS Central models US sales tax using three building blocks:

  • Tax Jurisdictions: Individual taxing authorities, such as a state, county, or city (for example, Georgia State, Fulton County, Atlanta City).
  • Tax Areas: Groups of jurisdictions that apply to a specific geographic location (for example, Atlanta, GA combines state, county, and city jurisdictions).
  • Tax Groups: Product categories that determine whether and at what rate an item is taxed (for example, Taxable, Food, Non-Taxable).

A Tax Area Code is assigned to each store and, where applicable, to each customer or ship-to address. When a POS transaction is posted, LS Central creates one sales tax entry per jurisdiction and tax group combination, providing a full breakdown of tax collected by authority.

Canada

Canada uses both federal and provincial taxes. LS Central accommodates the three primary types:

  • GST (Goods and Services Tax): A federal tax applied to most goods and services.
  • PST (Provincial Sales Tax): A provincial tax applied in some provinces separately from GST. Quebec uses QST (Quebec Sales Tax) instead of PST.
  • HST (Harmonized Sales Tax): A combined federal and provincial tax used in certain provinces instead of separate GST and PST.

Each province determines which tax type applies. LS Central uses the same Tax Areas and Tax Jurisdictions framework as the US to model Canadian tax rules.

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