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7.2 - Taxability of Handling Charges

Depending on how you show the handling charge on your document, it may be included with your freight/shipping line item, or it can be a line itself on the transaction. In the case where your handling charge is combined with freight/shipping, you do not need a separate line, there is a tax code that covers this scenario, FR030000. When your handling charge is separately stated from the freight/shipping charge, you just need to treat the handling charge as another line. Let’s take a look at our transaction again, this time with handling separately stated:

Test Case - 7.2.1

Setup

  • You are shipping an item from Washington to Florida.
  • In your connector, create the following transaction:
    • Document Type: SalesInvoice
    • Document Code: Chapter-7-Test-4
    • Company Code: DEVGUIDE
    • Document Date: 2017-06-15
    • Customer Code: TESTCUSTOMER
  • Addresses:
  • ShipFrom
    • 100 Ravine Lane NE, Bainbridge Island, WA 98110
  • ShipTo
    • 3500 Pan American Dr., Miami FL 3133
  • Line #1:
    • Quantity
    • Amount: 100
    • TaxCode: P0000000
    • Item Code: Widgets
    • Description: Taxable Gizmo
  • Line #2:
    • Quantity: 10
    • Amount: 100
    • TaxCode: NT
    • Item Code: Widgets
    • Description: Non-Taxable Gizmo
  • Line #3:
    • Quantity: 1
    • Amount: 5
    • TaxCode: FR020100
    • Item Code: Shipping
  • Line #4:
    • Quantity: 1
    • Amount: 3
    • Tax Code: OH010000
    • Item Code: Handling
  • Calculate tax for your transaction using AvaTax.

Assertions

  • The totalTax amount should be $7.29
  • Line 2 should have a tax amount of $0.00
  • Your 4th line should now include your handling
  • {
      "type": "SalesInvoice",
      "code": "Chapter-7-Test-4",
      "companyCode": "DEVGUIDE",
      "date": "2017-06-15",
      "customerCode": "TESTCUSTOMER",
      "addresses": {
        "shipFrom": {
          "line1": "100 Ravine Lane NE",
          "city": "Bainbridge Island",
          "region": "WA",
          "country": "US",
          "postalCode": "98110"
        },
        "shipTo": {
          "line1": "3500 Pan American Dr.",
          "city": "Miami",
          "region": "FL",
          "country": "US",
          "postalCode": "33133"
        }
      },
      "lines": [
        {
          "number": "1",
          "quantity": 10,
          "amount": 100,
          "taxCode": "P0000000",
          "itemCode": "Widgets",
          "description": "Taxable Gizmo"
        },
        {
          "number": "2",
          "quantity": 10,
          "amount": 100,
          "taxCode": "NT",
          "itemCode": "Widgets",
          "description": "Non-Taxable Gizmo"
        },
        {
          "number": "3",
          "quantity": 1,
          "amount": 5,
          "taxCode": "FR020100",
          "itemCode": "Shipping"
        },
        {
          "number": "4",
          "quantity": 1,
          "amount": 3,
          "taxCode": "OH010000",
          "itemCode": "Handling"
        }
      ]
    }