Recently, some customers and partners have come to us with some very good questions about the mass update feature for the external tax solution (US) and how it works, so we thought it would be a good idea to answer them shortly here.
So here’s the basic context, and the most important word here is “jurisdiction”: In the United States, sales and use tax is assessed at the jurisdiction level, and jurisdiction codes are used to indicate the specific jurisdiction where the transaction is taxed. And, of course, the jurisdiction determines the ultimate rate at which the transaction is taxed.
So far, so good, but here’s a further complication: These jurisdictions are not static. Far from it—they’re actually fairly fluid. Jurisdiction boundaries can be redrawn, tax rates can change at any level up or down the jurisdiction chain, and different kinds of products or transactions can be defined as taxable or tax exempt. With literally thousands of jurisdictions, any of which can change at any time, it’s both difficult and important to keep up to date on these changes.
This is the core of your relationship with your external tax provider, and this is where the mass update tool comes in. The mass update consists of two service calls that run in sequence. The first, the “Get Changed Jurisdiction Code List” service, communicates with your tax partner to retrieve a table of tax jurisdiction codes that have changed within a specified period. The second, the “Mass Redefine Tax Jurisdiction Code” service, sends your tax partner a list of address information for those items where there were changes and your partner’s system returns a list of updated jurisdiction codes.
Running these services in sequence makes the update faster while preventing performance issues. The first service finds all of the changes, and the second service retrieves the update information for the master data address information for the changed items, rather than for everything.
Here’s a sample case: Let’s say that you know that some changes will be going into effect October 1. You’re going to need to get those updates into your system, so you can schedule the “External Tax Jurisdiction Code Mass Update” job. This job then runs the two update services, compares the results from your tax partner, and makes the necessary changes.
You can also schedule this job to run at regular intervals to keep abreast of changes as they happen. This way, you don’t have to affirmatively schedule it when you read about upcoming changes, or when your tax partner informs you that changes are coming or have occurred, or, worse, when you notice the changes after the fact.
We hope that this helps answer your questions about the mass update for the external tax solution for the United States.
As always, please do reach out if you have more questions. We’re happy to answer them for you!