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Configuring Taxes

Corey Syrnyk
  • Updated

Overview

Stax Bill offers two levels of taxation to fit your needs:

  • Basic Taxation: Provides worldwide support for state and federal sales taxation
  • Avalara Direct Taxation: Supports the configuration of product-specific tax rules based on geography, as well as support for European VAT.

How do I know which tax solution I need?

  • If you are in North America and only need to tax at the state/provincial and federal level, basic taxation is included in the base Stax Bill platform. Contact Support to enable taxation in your Stax Bill environment.
  • If you need the ability to charge taxes by product type in addition to geography or you are subject to European VAT taxation rules, you will need to obtain your own Avalara account as well as subscribe to Stax Bill's Avalara Direct Taxation feature. Please visit avalara.com to sign up for your Avalara account and then contact your sales representative to enable this feature in your environment.

    Do I have Taxes Configured on Stax Bill?

    Tax configuration is currently handled by Support and is normally set up during the onboarding process.

    To determine if you are configured for Taxation, go to Taxes via the Settings tab. When you click on the Taxes option, you will see a message that tells you whether or not taxes are enabled.
    If no taxes are enabled, you will see the following screen:

    mceclip0.png

     

    Tax Exemption by Product

    The ability to tax or not tax a product is controlled by the Tax Exempt option at the Product level. If a product is configured to be Tax Exempt, this product will not be taxed even if you have taxes configured on Stax Bill.

    Basic Taxation

    You can use Stax Bill's basic taxation if:

    • You reside in Canada or the United States and only need tax calculations at the provincial/state and federal level.
    • You reside outside Canada or the US and are not subject to European VAT taxation rules.

    Examples:

    • Canada - Combination of Provincial & Federal taxes charged that are configured based on your business main office location.
    • Australia - Set up Flat 10% Sales Tax at the Country level.

     

Configuring Basic Taxation

Notes:

    • Taxes can be added, modified or removed at any time.
    • The additions, modifications or removal will only affect transactions going forward.
    • The changes will not back populate.

 

When activated, you will see a tax grid as shown below. A message will be displayed if there are no active rules (this is the default when taxation is first activated).

Configuring_Taxes_2.png

To create a new rule, click Create Tax Rule. You will be prompted with a modal dialog as follows:

Configuring_Taxes_3.png

  • Choose a Country from the first dropdown list.
    • Depending on the chosen country (for example, Canada or the United States), you may also be prompted for a Province / State. In this case, you can choose a specific province or state, or choose "All" to indicate that the tax you are configuring applies to all provinces or states within the chosen country. An example of this would be Canadian GST at 7%.
  • Next, enter a Tax Display Name. This text will appear on your customers' invoices if they are subject to this tax. For example, you might write "ON HST" for Ontario's Harmonized Sales Tax or "NY State Tax" for New York State tax.
  • (Optional) Enter a Tax Registration # that can be used to report taxes that must be remitted to the appropriate government. This is used in Stax Bill's tax reports.
  • Enter the Percentage amount for the tax, up to 4 decimals of precision. (Do not enter the % sign, it will be appended for you.)
  • These fields will be combined to generate a Unique Tax Code that can be used in reporting. You can modify this code if you wish, but it is recommended that you use the Stax Bill-generated default. It is not used in any correspondence with your customers and must be unique across your Stax Bill environment.
  • You can choose a Start Date from today onwards. This is the date on which the tax rule becomes effective. You cannot retroactively apply taxes.
    • If you choose today, the tax rule becomes effective immediately and will be used on the next posted invoice for which the rule is applicable.
    • If you choose a later date, then the tax rule is in a "scheduled" state and will be activated at midnight on the date specified in your account's local time zone (as specified in Timezone Defaults).
  • You can also optionally choose an End Date if you happen to know that this tax rule is only in effect for a certain period. Normally you would use the default ("No End Date") since you will usually not know when the tax rate will change.
You can come back and change the End Date of a tax rule at any time if you hear that a government is changing its rate on a certain date in the future. In this scenario, you would come back and enter an End Date for this rule, and then create a new rule for the new tax rate that is scheduled to begin on the date the government has specified.

Click Apply to apply to create the new rule and return to the grid, or click Cancel to return without saving any changes.

The Life Cycle of a Tax Rule

  • Scheduled = the tax rule has been created but will not be applied until its activation date (at midnight in your account's local time zone).
  • Active = the tax rule is currently active and will be applied to all newly posted invoices for which the rule is applicable.
  • Expired = you have specified an end date on a tax rule and that end date has now passed. The tax rule shows up in the Historic tab on the grid.
  • Retired = you have manually retired a tax rule by clicking the Retire button on the grid. This tax rule shows up in the Historic tab on the grid.
    • Expired and Retired rules cannot be re-activated. You must create new tax rules.
Stax Bill does not proactively monitor changes to tax rates and rules in any jurisdiction. You are responsible for monitoring the tax rates as they apply to your customer base and maintaining your tax rules accordingly.
In addition, Basic Taxation only applies to the country and state level. If you require more granular taxation (for example, at a county or zip code level), you must subscribe to one of Stax Bill's Avalara options.
 
 

Advanced Taxation

If you need to use more advanced taxation implementations, you can use Stax Bill's Avalara integration. See the integrations section for more information.

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