Introduction

Depending upon your locale, sales or other taxes may need to be charged on your merchandise and other sales. Consult your local tax authority for tax responsibilities.

Getting Started

There are several configurations related to taxes. Under Settings > Setup > Configuration, search for the term 'tax' to see a list of relevant changes.



First, you can choose a Tax ID as the default Tax ID for your products and database as a whole. Tax IDs available are managed via the system list 'Tax IDs'. See the Managing Lists help article for more information.

The second section of configurations determine the fall back address for tax responsibility calculation when there is no shipping address for the product. This will be further explained below under Nexus.

You can also set a fixed tax rate on each product, and control the default rate for these fixed rate products. While this is powerful, it is generally not desirable in the United States. This will be further explained below under Nexus.

Finally, you can set a GL Code for tax payments used in reporting and update terminology for Tax to meet your local requirements.

Nexus

Nexus is a general term for all the locations that your company has a tax responsibility in. For example, Configio has business operations in Spokane County, WA; which means we have Nexus for the whole state of Washington (WA). If a customer purchases a product from us and ships it to New York - no sales tax is collected by us since we do not have Nexus in NY.

By default, we add the relevant Nexus settings based upon the address provided on your service agreement. If your organization has tax responsibility in other States or areas than your service agreement address, contact support to add relevant Nexus Locations.

If Nexus is setup correctly, tax is then calculated based upon a product's Shipping Address or a fall-back address determined by configurations above.

It is relatively common for Events to be taxable at the Event location. Some clients will be inclined to use fixed tax rates in this instance. Instead, best practice is to set the fall-back for Events to the Location Address (Location of the Product) and use the Tax Nexus to calculate the correct tax rate. This eliminates future work for you and ensures the appropriate tax rate is charged at all times. For example, the local tax rate may change year over year and using the Tax Nexus to calculate the tax rate will automatically adjust for this rather than requiring you to manually update the tax rate on each product you have available.