Next, you create tax sets within the taxation configuration by following the steps below.
Once a tax method (Avalara, Billsoft, etc.) is chosen within the taxation configuration, the configuration settings load and the Tax Group Configuration form populates.
Note: The process for creating tax sets below is applicable to the Aria Internal Tax Engine. The form depends on the tax method chosen.
Creating Tax Sets
Getting Here: Click Configuration > Integrations > Taxation Configuration > New
- Enter a brief description for the jurisdiction for which you are configuring taxation in the Description field.
- Choose a jurisdiction for which this tax is assessed from the Jurisdiction drop-down.
The contents of this drop-down change, depending on the country that you chose in the prior taxation configuration step. Once the taxation configuration is complete, any new or existing customers residing in this country and jurisdiction, who consume a taxable service, are taxed.
- Select an option from the Credit Reduced field.
Note: When configuring a third-party tax service provider, tax is always assessed after a credit is applied to an invoice item (the equivalent of choosing Yes on this screen).
- No: This tax is assessed for the amount of the invoice before a credit is applied to an invoice line item.
- Yes: This tax is assessed for the amount of the invoice after a credit is applied to an invoice line item. If the credit is 100% of the invoice, then there is no tax. But if the credit is a partial amount, tax is calculated on the remaining balance.
- Select an option from the Tax Service Group section.
- Enter a Rate.
Note: You cannot leave the Rate field blank but the field will accept a zero (0) value after clicking Add Rate button, if "0" is desired.
- Select a Start Date and an End Date.
- Start Date: The date on which you begin to charge customers for this tax at the specified rate.
The default date is the day that the field is selected (today). However, you may want to choose a date in the future. For example, if you are configuring your production instance and you are using a third-party tax engine, you may want to delay the assessment of taxes until you have completely updated your third-party tax engine to work with your production instance.
- End Date: The date on which you no longer charge customers for this tax at the specified rate.
This is not a required field, however, you may want to specify an end date if you know that the tax rate for the jurisdiction will change. In that case, you can specify a calendar date of one day before the rate change, then add another row specifying the new rate with a start date of the jurisdiction rate change.
- Select a service name from the Service drop-down.
This is the name that is presented in the UI when reviewing a customer’s invoice, and on the statements sent to customers if your statement template is configured to show tax-based services.
- Click the Add Tax Set button.
This tax set is added to the taxation configuration and can be accessed at any time by going into that taxation configuration and clicking the Internal Values tab.
You can add a tax set for another jurisdiction in the same country by clicking the Add Tax Set button at the bottom of the Taxation Configuration screen. You can also add an additional tax set at any time.