For manufacturers selling across state lines, sales and use tax compliance is a legal obligation that carries real financial risk. Nexus rules, product taxability, exemption certificates, and use tax on purchases all interact in ways that can quickly overwhelm manual processes. Infor ERP LN provides a native tax framework that handles many scenarios, but most mid-to-large manufacturers also benefit from integrating a dedicated tax engine to handle the full complexity of U.S. and international indirect tax.
How Infor LN Handles Tax Natively
Infor LN includes a tax management framework based on tax codes, tax rates, and tax parameter tables. Tax codes are assigned to business partners, items, and order lines. When a sales order or purchase order is created, the system applies the appropriate tax code based on ship-to location, sold-to country, and item classification.
- Tax codes can be configured per country, state, and locality
- Tax exemption handling is supported at the business partner level
- Tax reporting is available by jurisdiction through standard finance reports
- VAT (value-added tax) is well-supported for European operations
- Use tax accrual is supported on the accounts payable side
Where Native LN Tax Falls Short
The native Infor LN tax engine works well for companies with straightforward tax profiles—a single state, limited product variety, or primarily B2B sales with broad exemptions. For companies with multi-state nexus, frequent rate changes, complex product taxability rules, or high volumes of consumer transactions, the native engine requires constant manual maintenance and creates audit risk.
The core challenge is that the U.S. has over 13,000 taxing jurisdictions, each with its own rates and rules. Product taxability rules vary significantly by state—what is exempt manufacturing equipment in Ohio may be taxable in Texas. Maintaining accurate tax tables manually is effectively impossible at scale.
Integrating a Tax Automation Engine
The industry-standard solution is to integrate Infor LN with a dedicated tax automation platform such as Avalara AvaTax or Vertex O Series. These platforms maintain continuously updated rate and rule databases and communicate with Infor LN in real time during order entry.
Infor LN supports outbound tax determination calls via its standard API framework. The integration typically works as follows: when a sales order line is saved, LN sends a tax calculation request to the tax engine with key fields (ship-to address, ship-from address, item code, transaction amount). The tax engine returns the calculated tax, which LN stores on the order and ultimately posts to the general ledger.
Exemption Certificate Management
Exemption certificates are another area where manufacturers frequently run into compliance gaps. B2B manufacturers may have hundreds or thousands of exempt customers, each requiring a valid certificate on file. Infor LN allows exemption status to be set at the business partner level, but it does not manage the collection, validation, and expiration tracking of the underlying certificates.
Dedicated certificate management solutions (such as Avalara CertCapture or Sovos) integrate with Infor LN to automate certificate requests, store certificates in a searchable repository, and alert staff when certificates are approaching expiration. During a tax audit, having a complete and current certificate file is the difference between passing and facing significant assessments.
Use Tax on Purchases
Manufacturers often focus tax compliance efforts on sales but overlook use tax on purchases. If a vendor does not charge sales tax on a purchase that is taxable in the ship-to state, the company owes use tax directly to the state. Infor LN's AP module supports use tax accrual, allowing tax to be calculated and accrued on vendor invoices where tax was not charged.
- Configure use tax codes on vendor records and item groups
- Set up automatic use tax accrual for domestic vendor invoices
- Establish a review workflow for high-value capital purchases
- File use tax returns on schedule to avoid late payment penalties
- Integrate with the same tax engine used for sales to maintain consistent logic
How Auspex Can Help
Auspex Consulting specializes in sales and use tax compliance for Infor LN customers. We assess your current tax configuration, identify exposure areas, design and implement tax engine integrations, and develop ongoing compliance processes. If you are facing an audit, expanding into new states, or simply unsure whether your current setup is defensible, contact us for a tax configuration review.