Markup percentage for tax calculation on Drop Shipments

Based on customer requirements a new feature is included in the solution. The option to configure a markup percentage over the document lines when the sale is a drop ship in a specific ship-to state.

For example in the state of California, it’s required to calculate the taxes based on the sale taxable amount plus 10%. Meaning the resulting tax amount for the document will be calculated based on the document total plus 10%, while the document total before tax will remain the same in SAP.

To configure this, a new section was added:

You can enable or disable the functionality by using the Markup checkbox.

Markup will by applied for a specific ship-to state, in this sample is CA (California). Always use the 2 digit code for the state, as configured in SAP.

The Ship-To state is evaluated by each line to apply the markup, so pay attention to the Avatax Ship-To Type UDF at the document line level, where you specify the Ship-To to be considered for the line (Document Ship-To, Line Ship-To, Branch or Warehouse).

The markup percentage is also configurable, in the screenshot is 10%.

Finally, you must previously configure a Ship-To Destination address as Drop-Ship or not. This is done using a new UDF: CRD1.U_ARGNS_DROPSHIP

The markup will only be applied when all conditions are true:

• The markup functionality checkbox is checked.
• The ship-to address has the U_ARGNS_DROPSHIP set to Yes at the Business Partner master record.
• The ship-to state of the address matches the configured ship-to state in the settings for the markup calculation.

When posting the document to AvaTax, you will get the document committed with the extra markup applied over the matching lines.