Select this option to enable the reversal of sales tax on cash discounts for the selected sales tax group. When you create ...

Select this option to enable the reversal of sales tax on cash discounts for the selected sales tax group. When you create a sales tax group, this option is selected or cleared according to the value in the Reverse sales tax on cash discount field in the General ledger parameters page. You can select or clear this option for individual sales tax group. For example, a sale in the amount of 100.00 has a 10% tax of 10.00, for a total of 110.00. The customer received a 2% cash discount for early payment. If you select this option, the sales tax of 10.00 is automatically reversed by 2% of 10.00, or 0.20.
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