Happy Business Starts Here

Highlighted
Zuora Support

Which tax rate is applied to the invoice when there are multiple tax rates in Z-tax?

Question:
We are using Zuora Tax for the tax calculation and we have multiple tax rates for different effective time periods and some to the effective period starts from the middle of the month. In this case how would I know which Tax rate is going to be applied to the invoice?





If you found my answer helpful, please give me a kudo ↑
Help others find answers faster by accepting my post as a solution √

1 REPLY 1
Zuora Support

Re: Which Tax rate is applied to the invoice when there are multiple tax rates in Z-tax?

Answer: 
When there are multiple TAX rates, the Invoice Date is the Key to find which tax rate will be applied to the invoice. 
 
If you navigate to Billing Settings -> Setup Taxation Codes, you will see all the taxation codes associated to your tenant. Click on “Edit” in front of the any taxation code and you will see the details of that code. Refer the Tax codes as below.
 
Screen Shot 2019-06-18 at 4.39.49 PM.png
 
You can see here the tax code “shelly tax” has two effective period as below.
 
1. Effective Period 01/01/2019 - 02/14/2019
 

Screen Shot 2019-06-18 at 4.44.30 PM.png

 

2. Effective Period: 02/15/2019 - 12/31/2020

 

Screen Shot 2019-06-18 at 4.44.17 PM.png

 

We have a 12 months TERMED subscription with monthly recurring charge and the term starts 01/01/2019 - 12/31/2019. The subscription owner has Bill To/Sold To contact address as of California.
 
If we create the Bill Run for this subscription with the Invoice Date as 02/14/2019, the subscription will fall under the 1st effective period of taxation code and the invoice will have taxation calculated with 3% and 2% rate. Refer the details below.
 
Screen Shot 2019-06-18 at 4.50.18 PM.png
 
However, if we create the Bill Run for this subscription with the Invoice Date as 02/15/2019, the subscription will fall under the 2nd effective period of taxation code and the invoice will have taxation calculated with 5% and 7% rate. Refer the details below.
 
Screen Shot 2019-06-18 at 4.55.34 PM.png
 
So, Invoice Date decides the Tax Effective period for the Tax rate which the invoice will be using.
 
You can refer the below Knowledge Center article for more details.





If you found my answer helpful, please give me a kudo ↑
Help others find answers faster by accepting my post as a solution √