FAQs - Taxing

  1. What drives taxing on a product?
  2. How can I tell what taxes are applied to a product/charge?

 

What drives taxing on a product?

Taxing is driven through multiple ways for a Product. These include:

  • Commercial – determines if it is a business or residential customer. Business customers may have different taxes
  • LSO – Local Service Office or NPANXX. This is used in taxing account level charges and within the fallback method (see below) at the product level to determine jurisdiction. (Applies to Avalara Taxing Clients only)
  • Zipcode – This is used in taxing account level charges and within the fallback method (see below) at the product level to determine jurisdiction.

TBS also supports the ability to flag a customer exempt from taxes. The Bill Setup tab has the following options:

  • Exempt Federal - Exempts all federal taxes except Fed USF
  • Exempt State - Exempts all state taxes
  • Exempt County - Exempts all county taxes
  • Exempt City - Exempts all city taxes
  • Exempt All Taxes - Acts the same as if all of the above are checked but also exempts Fed USF

Note: TBS does have the ability to exempt a customer from specific individual taxes to handle special customer exemptions. This needs to be setup by PTT.

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How can I tell what taxes are applied to a product/charge?

Financial -> Tax Elements.

TBS Taxing utilizes an underlying taxing engine that requires a multitude of information to exactly determine the taxes that will be generated on charge amounts. Taxes are not generated on charges until the time of billing.

The Taxing Elements tool allows customers to preview the taxes that will be applied to the charge prior to seeing it in billing. This tool will support previews for Integrated Product Charges as well as Traditional Product USOCs. Within the inventory of Charges or USOCs, when on a selected item, the user can select the View Tax Elements link, provide some additional information such as tax exemptions, class of service, city limit location, product location and dates for simulating taxes.

The tool will return all Billable and Non-Billable Taxes for the charge selected considering all the customer/location settings.

Additionally, for customers utilizing the REST service, an additional feature is included to outline the proper GET and POST methods for the return data.

See Taxing Elements for more information.

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