SD tax G/L account determination

Question

First, I am not a Finance person nor do I know a lot about tax configuration.  My background (relevant for this issue) is in S/D pricing and associated account determination.  This is an S/D tax calculation and account determination issue for the United States.
I am attempting to generate a “use” tax in an internal service order and then to populate the correct G/L account(s) with these tax values.  The service order, which is really just a sales order,  generates a statistical value for the basis and then I have pricing condition types (condition class = “D” (“taxes”), condition category = “D” (“Tax”)) specified in the pricing procedure.  These “tax” condition types are correctly calculating the tax amount.
Normally, to point to the correct G/L account for a pricing condition type, you would configure Account Determination within S/D.  The simplest form would be the usage of the account key.  The account key would be specified in the “AccKey” column and account determination configuration would point this key to the correct G/L account.
I understand (both from my own very recent experience and also from some of the information I have read on the internet) that things might be a little bit different when determining a G/L account for tax.  Originally I specified two different account keys in the pricing procedure for the tax condition types (normally I would have specified just one).  I specified MW1 through MW4 in the account key column for all 4 tax condition types and MWS in the accrual column.  My intent was to update the tax expense account from MW1 – 4 and the tax accrual account from MWS (I realize I might have this backward).
When I created a billing document, SAP would not create the accounting document.  It indicated (from my recollection) that it was missing a tax code for the G/L account for the first tax condition type (“YTX1”).  Cutting through the history, it appears that SAP needs this code to point to the correct G/L account for S/D.  I also learned that there is a tax code field in the tax condition record (VK11) where you specify this code.
I am actually familiar with the configuration and setup for use tax for A/P vendor invoices.  I had to perform this  setup very recently.  In short, I know that the tax code determines what the tax rates will be and also determines the G/L accounts.  I know how to setup a situation for tax accrual (this is setup found in tax code U1).
My questions are the following:
1) Is it true that I have to use the tax code to determine the G/L accounts for taxes generated in an S/D pricing procedure?  Is it possible I am doing something wrong in the S/D account determination (at the moment, not quite sure what this would have been)?
2) Is it possible that I am adversely affecting account determination by specifying an account key in the accrual column of the pricing procedure for the tax pricing condition types?
3) If we do have to specify a tax code in the tax pricing condition records in order to use the FI tax procedure to point to the correct G/L account, do we also specify the tax rates in this FI tax code or do we still specify them in the S/D tax pricing condition records?  It does not make sense to have to specify these rates twice.  In short, what does SAP actually use for tax calculation?
Thanks a lot – Ed Seigler

Answer 1

Hello Edward,
The tax code represents a tax category which must be taken into consideration when making a tax return to the tax authorities.
Tax codes are unique per country. The tax rate calculation rules and further features are stored in a table for each tax code.
SAP supplies a tax calculation procedure for each country. The procedure comprises a list of all common tax types with rules for tax calculation.
You have to define a separate  tax on sales/purchases code for each country in which one of your company codes is located. Each code contains one or more tax rates for the different tax types.
Tax codes are actually configured in FI, but they play a significant role while creating tax condition records for a particular condition type.
Account keys in the account determination procedure connect the condition types to the relevant GL accounts. It doesnt have any impact on tax calculation. Its a procedure that is purely used to map GL accounts to the condition types.
Finally, i would suggest you to check at the condition record level, whether you have assigned the correct tax code to the appropriate condition type to rectify the error.
<b>REWARD POINTS IF HELPFUL.</b>
Regards
Sai