[jira] Created: (OFBIZ-225) Discussion about the interaction between order total promotions and sales taxes

[Nicolas Malin (Jira)]

Discussion about the interaction between order total promotions and sales taxes
-------------------------------------------------------------------------------

                 Key: OFBIZ-225
                 URL: http://issues.apache.org/jira/browse/OFBIZ-225
             Project: OFBiz (The Open for Business Project)
          Issue Type: Wish
            Reporter: Jacopo Cappellato


 Bug is sales tax adj when there is a promotion applied to the order total.

I've set up a promotion, 10% applied to the order total, and a sales tax, 20%.

When I create the order, a sales tax adjustment is attached to every order item without considering the promotion (20%) that is applied to the order total.
For an example, see the attached picture: the order item subtotal is $500, the sales tax adj (20%) is $100 (!), even if there is a promotion for the order total (50$).


 All   Comments   Work Log   Change History      Sort Order: [navigator.ascending.order]
Comment by David E. Jones [09/Aug/05 10:34 AM]
[ Permlink ]
This is an interesting issue, and has been around for a while.

The main problem is that sales tax is calculated per-item and not per-order, so the adjustments go on each item. For order discounts the only way I can think of to handle them is to pro-rate the discount over each order item based on that item's value relative to the total value of the order. I guess that's not being done now...

Anyone have any other ideas?

-David

Comment by Jacopo Cappellato [09/Aug/05 01:02 PM]
[ Permlink ]
My proposal: we could leave everything as is now and at the end we could add a new negative sales tax adjustment to compensate the total sales tax amount.

Does it make sense?

Comment by Si Chen [09/Aug/05 01:16 PM]
[ Permlink ]
This is not necessarily a bug. Some stores don't give you a promotion on the pre-tax amount. One "solution" is to change the promotion's description to say it is a discount on the after-tax amount.

If we want to add a discount on the "pre-tax" amount, I think David's suggestion is right. Maybe we should calculate the order item adjustments, all the promotions, order totals. Then calculate the total tax on the order. Then use the order item's value / order total to pro-rate the tax against each item.

The reason we don't want to add a separate item is if someone returns one of the items, it'll be very hard to track down the effect of returning an item if the adjustments and taxes aren't kept together.

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[Nicolas Malin (Jira)]

    [ http://issues.apache.org/jira/browse/OFBIZ-225?page=comments#action_12433942 ]
           
Eriks Dobelis commented on OFBIZ-225:
-------------------------------------

If the store displays price with tax then the tax should be calculated per item not per order as otherwise the sum would not always be exactly the sum of all individual items with tax (due to rounding).

> Discussion about the interaction between order total promotions and sales taxes
> -------------------------------------------------------------------------------
>
>                 Key: OFBIZ-225
>                 URL: http://issues.apache.org/jira/browse/OFBIZ-225
>             Project: OFBiz (The Open for Business Project)
>          Issue Type: Wish
>            Reporter: Jacopo Cappellato
>
>  Bug is sales tax adj when there is a promotion applied to the order total.
> I've set up a promotion, 10% applied to the order total, and a sales tax, 20%.
> When I create the order, a sales tax adjustment is attached to every order item without considering the promotion (20%) that is applied to the order total.
> For an example, see the attached picture: the order item subtotal is $500, the sales tax adj (20%) is $100 (!), even if there is a promotion for the order total (50$).
>  All   Comments   Work Log   Change History      Sort Order: [navigator.ascending.order]
> Comment by David E. Jones [09/Aug/05 10:34 AM]
> [ Permlink ]
> This is an interesting issue, and has been around for a while.
> The main problem is that sales tax is calculated per-item and not per-order, so the adjustments go on each item. For order discounts the only way I can think of to handle them is to pro-rate the discount over each order item based on that item's value relative to the total value of the order. I guess that's not being done now...
> Anyone have any other ideas?
> -David
> Comment by Jacopo Cappellato [09/Aug/05 01:02 PM]
> [ Permlink ]
> My proposal: we could leave everything as is now and at the end we could add a new negative sales tax adjustment to compensate the total sales tax amount.
> Does it make sense?
> Comment by Si Chen [09/Aug/05 01:16 PM]
> [ Permlink ]
> This is not necessarily a bug. Some stores don't give you a promotion on the pre-tax amount. One "solution" is to change the promotion's description to say it is a discount on the after-tax amount.
> If we want to add a discount on the "pre-tax" amount, I think David's suggestion is right. Maybe we should calculate the order item adjustments, all the promotions, order totals. Then calculate the total tax on the order. Then use the order item's value / order total to pro-rate the tax against each item.
> The reason we don't want to add a separate item is if someone returns one of the items, it'll be very hard to track down the effect of returning an item if the adjustments and taxes aren't kept together.

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[Nicolas Malin (Jira)]

     [ http://issues.apache.org/jira/browse/OFBIZ-225?page=all ]

Jacopo Cappellato updated OFBIZ-225:
------------------------------------

    Component/s: order

> Discussion about the interaction between order total promotions and sales taxes
> -------------------------------------------------------------------------------
>
>                 Key: OFBIZ-225
>                 URL: http://issues.apache.org/jira/browse/OFBIZ-225
>             Project: OFBiz (The Open for Business Project)
>          Issue Type: Wish
>          Components: order
>            Reporter: Jacopo Cappellato
>
>  Bug is sales tax adj when there is a promotion applied to the order total.
> I've set up a promotion, 10% applied to the order total, and a sales tax, 20%.
> When I create the order, a sales tax adjustment is attached to every order item without considering the promotion (20%) that is applied to the order total.
> For an example, see the attached picture: the order item subtotal is $500, the sales tax adj (20%) is $100 (!), even if there is a promotion for the order total (50$).
>  All   Comments   Work Log   Change History      Sort Order: [navigator.ascending.order]
> Comment by David E. Jones [09/Aug/05 10:34 AM]
> [ Permlink ]
> This is an interesting issue, and has been around for a while.
> The main problem is that sales tax is calculated per-item and not per-order, so the adjustments go on each item. For order discounts the only way I can think of to handle them is to pro-rate the discount over each order item based on that item's value relative to the total value of the order. I guess that's not being done now...
> Anyone have any other ideas?
> -David
> Comment by Jacopo Cappellato [09/Aug/05 01:02 PM]
> [ Permlink ]
> My proposal: we could leave everything as is now and at the end we could add a new negative sales tax adjustment to compensate the total sales tax amount.
> Does it make sense?
> Comment by Si Chen [09/Aug/05 01:16 PM]
> [ Permlink ]
> This is not necessarily a bug. Some stores don't give you a promotion on the pre-tax amount. One "solution" is to change the promotion's description to say it is a discount on the after-tax amount.
> If we want to add a discount on the "pre-tax" amount, I think David's suggestion is right. Maybe we should calculate the order item adjustments, all the promotions, order totals. Then calculate the total tax on the order. Then use the order item's value / order total to pro-rate the tax against each item.
> The reason we don't want to add a separate item is if someone returns one of the items, it'll be very hard to track down the effect of returning an item if the adjustments and taxes aren't kept together.

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[Nicolas Malin (Jira)]

     [ http://issues.apache.org/jira/browse/OFBIZ-225?page=all ]

Jacopo Cappellato updated OFBIZ-225:
------------------------------------

    Priority: Minor  (was: Major)

> Discussion about the interaction between order total promotions and sales taxes
> -------------------------------------------------------------------------------
>
>                 Key: OFBIZ-225
>                 URL: http://issues.apache.org/jira/browse/OFBIZ-225
>             Project: OFBiz (The Open for Business Project)
>          Issue Type: Wish
>          Components: order
>            Reporter: Jacopo Cappellato
>            Priority: Minor
>
>  Bug is sales tax adj when there is a promotion applied to the order total.
> I've set up a promotion, 10% applied to the order total, and a sales tax, 20%.
> When I create the order, a sales tax adjustment is attached to every order item without considering the promotion (20%) that is applied to the order total.
> For an example, see the attached picture: the order item subtotal is $500, the sales tax adj (20%) is $100 (!), even if there is a promotion for the order total (50$).
>  All   Comments   Work Log   Change History      Sort Order: [navigator.ascending.order]
> Comment by David E. Jones [09/Aug/05 10:34 AM]
> [ Permlink ]
> This is an interesting issue, and has been around for a while.
> The main problem is that sales tax is calculated per-item and not per-order, so the adjustments go on each item. For order discounts the only way I can think of to handle them is to pro-rate the discount over each order item based on that item's value relative to the total value of the order. I guess that's not being done now...
> Anyone have any other ideas?
> -David
> Comment by Jacopo Cappellato [09/Aug/05 01:02 PM]
> [ Permlink ]
> My proposal: we could leave everything as is now and at the end we could add a new negative sales tax adjustment to compensate the total sales tax amount.
> Does it make sense?
> Comment by Si Chen [09/Aug/05 01:16 PM]
> [ Permlink ]
> This is not necessarily a bug. Some stores don't give you a promotion on the pre-tax amount. One "solution" is to change the promotion's description to say it is a discount on the after-tax amount.
> If we want to add a discount on the "pre-tax" amount, I think David's suggestion is right. Maybe we should calculate the order item adjustments, all the promotions, order totals. Then calculate the total tax on the order. Then use the order item's value / order total to pro-rate the tax against each item.
> The reason we don't want to add a separate item is if someone returns one of the items, it'll be very hard to track down the effect of returning an item if the adjustments and taxes aren't kept together.

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