How do I calculate sales tax on a rate?

Rates

The sales tax is a tax levied on the sale of goods and services; usually calculated as a percentage of the purchase price. To calculate sales tax on a rate, add the sales tax as a percentage to the rate.

Usage x Rate Level x Sales Tax = Calculated Amount

Calculating sales tax on a rate

1. Open Connect Utility Management > Organization > Rates.

2. Use the Sales Tax box to enter the sales tax as a percentage.

Example: 0.03 is a 3% sales tax.

Rates, Sales tax box

Linking sales tax to a rate vs. setting up a rate for sales tax

If the sales tax rate will be the same rate for multiple services and rates, then you can set up a sales tax rate that bill sales tax. The rate will calculate sales tax. You can add the rate to the service that will be taxed instead of instead of adding the sales tax to each individual rate.

Example: Using sales tax box on a rate

In this example, the rate includes the sales tax and the rate is assigned to a service. See the above image.

Calculated Amount = Service Usage x Rate

Example: Using sales tax rate with a rate

This example uses a rate, a rate that calculates sales tax, and a service. The rate is assigned to a service. A service for sales tax is set up and then the sales tax rate is linked to the sales tax service.

Calculated Amount = Service Usage x Rate x Sales Tax Rate

Rates, Service is linked to Sales Tax service

When you calculate automatic billings, the sales tax service is included with the services that can be included in the calculation.

Calculate Automatic Billings, Services box - Sales Tax

202205, 2022Jun29