Use this activity to designate a supplier as subject to tax reporting and/or withholding. In the United States, this is known as Form 1099 income tax reporting and withholding. You can also define valid supplier income types, which identify the categories of income each registered invoice line from the supplier represents.
If necessary (i.e. Supplement Tax Withholding option in Enterprise/Company/Tax Control is not enabled), you must also specify the states where tax withholding at state level applies for the supplier.
If the supplier is subject to income tax withholding at the state level, click the Supplier State Tax Info tab. This tab is visible only if the Supplement Tax Withholding option is enabled on the Enterprise/Company/Tax Control tab. In the Report Code field, select a supplier state report code from the List of Values. Values appear automatically in the Description and Country Code fields. Select the state for which you want to report and/or withholding taxes using this report code. You can specify up to two states using report codes 16A and 16B.
This activity requires that:
For state income tax reporting and withholding, the Supplement Tax Withholding option must be enabled on the Enterprise/Company/Tax Control tab. Also, tax report codes with the State Tax Withhold tax function must have been defined in the Report Codes for Tax Lines, Withholding page.
As a result of this activity, supplier income types can be registered for invoice lines, which enables income taxes to be reported and/or withheld as required by law.