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Tax Connector Vertex/Tax Exemptions
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Tax Connector Vertex/Tax Exemptions
Hi all, anyone using Vertex for tax calculation with the commerce piece? I am interested in knowing if someone got the omni-channel in D365 involving POS sales and fulfilment working with Vertex. More specifically if anyone got the tax exemption processes handled with this connector – are you using customer groups or some other field to identify exemptions? In standard D365, we can use customer group or define a different sales tax group on the customer or sales order however to have exemptions work with the connector, there is a single sales tax group across the board. Any feedback would be appreciated.
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6 Replies
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@CrystalAhrens or @kellygustafson do you have any insights you could share to help Raheel?
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Hi Raheel – Typically the way that it works is all customers are assigned a default “Vertex AR” sales tax group. This essentially acts as an enablement indicator telling D365 to call to Vertex to calculate tax for any of the customer’s orders. In the Vertex dashboard separate from D365 there is a customer exemption page which allows you to tell the system which customers are exempt and where. You can manage this either by customer ID or by customer group. If a customer exemption is setup, D365 and Vertex will exempt the tax automatically during the calculation.
The benefit of this approach is that Vertex then tracks all the necessary information for customer exemptions so that you know you are compliant in case of an audit including the certificates themselves, expirations, and or specific exemption rules.
If you need further information or if this approach does not work for you, I can help explore other alternative processes.
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Hi James, thanks for you feedback on this. Customer group is what we have been exploring as well however has some limitations like (i) Customer may not always be an exempted and changing CustGroup on the fly on POS is not nice customer experience due to the fact that it can take time – consider channel database sync time too! (ii)We lose ability to capture tax exempt info like standard POS would allow us to. To handle this, we’ll need development on POS to capture exempt info to be compliant. (iii)Since not all retail walk-in customers will be registered so we’ll have a challenge there. We’re exploring creating generic customers for them while at the same time analyzing customization to allow capturing the exemption number on the sale transaction itself to remain compliant.
A better solution would have been to use standard tax override feature of D365/POS with Vertex allowing us to capture the info within POS/HQ as well as send to Vertex for reporting purposes. Less customization the better, especially for common to industry scenarios like these.
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Thank you for providing that further insight. That is helpful. Perhaps it might be easiest to discuss these over a Teams meeting, but here are my thoughts. I’ve seent a connection request. Feel free to reach out if you would like.
(i) Customer may not always be an exempted and changing CustGroup on the fly on POS is not nice customer experience due to the fact that it can take time – consider channel database sync time too!
I have worked with other retailers who face this challenge. It’s important to understand why the customer is not always exempt. If it’s due to a partial exemption type, those exceptions can be setup in Vertex as part of the exemption information. However, sometimes it’s based on how the customer intends to use the product. In that case it’s impossible to systematically predict what qualifies as exempt and what doesn’t. Therefore, some sort of user input indicator would generally need to be supplied. I would look to find if there’s an existing data field that could be leveraged allowing a user to indicate to the system when to disable the exemption. Vertex has the ability to utilize flex fields to disable the exemption.
(ii)We lose ability to capture tax exempt info like standard POS would allow us to. To handle this, we’ll need development on POS to capture exempt info to be compliant.
What exempt info beyond the exemption number does the POS track? Typically Dynamics doesn’t store enough exemption information for compliance and that is why users choose to track that information within the Vertex engine.
(iii)Since not all retail walk-in customers will be registered so we’ll have a challenge there. We’re exploring creating generic customers for them while at the same time analyzing customization to allow capturing the exemption number on the sale transaction itself to remain compliant.
Our connector may not honor the tax override functionality by default, but I would expect you could leverage another field/value to trigger the system to either apply or disable an exemption. Essentially achieving the same thing as a user override to turn on or off tax. With that said, this is not a typical approach many other retailers follow. To ensure you are compliant it’s in almost all cases required the exempt customer be registered and the complete exemption information on file.
A better solution would have been to use standard tax override feature of D365/POS with Vertex allowing us to capture the info within POS/HQ as well as send to Vertex for reporting purposes. Less customization the better, especially for common to industry scenarios like these.
Since I’m with Vertex and our Microsoft team, I’m happy to take your feedback and explore other alternative designs. One option I’m not sure you’ve considered is offering limited access for certain store personnel to the Vertex system which would allow them to create/index a customer exemption. This is real-time information so the second an exemption is indexed in Vertex, you would see exempt results on the customer’s transaction and it would ensure you have the proper documentation in case of an audit.
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