BC Set Up Cultivation Tax
Introduction
Cultivation tax can be added to Purchase Orders and Sales Orders. This document shows the breakdown for Purchases, but it can be done similarly for Sales.
Prerequisites:
Create Service Items for each of the different types of Cultivation Tax.
Create Item Charges for each of the different types of Cultivation Tax.
The Gen. Prod Posting Group on both the Item and Item Charge cards reflect where the cultivation tax will post in the General Ledger.
Process
Cultivation Tax is generally added to the Purchase Orders in one of two ways:
A – The vendor includes the cultivation tax in the cost of the item
B – The vendor did not include the cultivation tax in the cost of the item, and instead had a separate line for tax.
A - Cultivation Tax Included in the Cost of the Item
Example:
To enter the Cultivation Tax on the Purchase Order, create and receive the Purchase Order as per the standard procedure.
Enter a second line for the Cultivation Tax service item. The Quantity should be negative, so the line amount will be negative.
3. Process the order as per the standard procedure.
B - If the vendor did not Include the Cost of the Cultivation Tax in the Unit Cost.
You must add a Charge (Item) to ensure the tax is distributed proportionally, and the inventory costs get updated.
Example:
Create and receive the Purchase Order as per the standard procedure.
Add a line to the Purchase Order with Type = Charge (Item)
Select Line, then Item Charge Assignment
On the Item Charge Assignment page, select Suggest Item Charge Assignment on the Actions ribbon.
Select Equally, and then select OK.
The Qty. to Assign field will populate. Press OK and close the page.
Enter a third line for the Cultivation Tax service item. The Quantity should be negative, so the line total will be negative. Process the order as per the standard procedure.