IN BRIEF
Tax Rates in iClassPro define the percentage of tax applied to taxable charges and can vary by location, such as country, state, province, county, or municipality. This article explains what Tax Rates are, how to create and edit them, and important accounting considerations to understand before making changes. 

• Overview
• Accessing the Feature
• Step-by-Step Instructions
  • Creating a New Tax Rate
  • Editing an Existing Tax Rate
• Accounting Considerations
  • Important Notes About Editing Tax Rates
  • Location Changes and System Warnings
  • Inclusive Tax
  • Financial Reporting
• Troubleshooting & FAQs
• Related Articles

Overview

Tax Rates allow administrators to apply a percentage-based tax to specific charges in iClassPro. When creating charges, each charge can be designated as taxable or non-taxable, and the applicable Tax Rate is then calculated automatically based on the settings and assigned locations.

Tax Rates are closely tied to financial data and reporting. Because of this, careful consideration should be given before editing or replacing an existing Tax Rate.

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Accessing the Feature

1. From the main navigation menu, go to SETTINGS > SETUP > GENERAL SETTINGS > TAX RATES.
2. Review the list of existing Tax Rates, or proceed to create a new one.

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Step-by-Step Instructions

Creating a New Tax Rate

1. Navigate to SETTINGS > SETUP > GENERAL SETTINGS > TAX RATES.
2. Select Add New Tax Rate. 
   
3. Enter the following information: 
   
   • Name
     • A descriptive name for the Tax Rate (for example, “State Sales Tax”).
   • Rate
     • Enter the numeric tax value only (do not include the percentage symbol).
   • Selected Locations
     • Select one or more locations where this Tax Rate should apply.
4. Select Create to save the new Tax Rate.

Once created, the Tax Rate becomes available for use with taxable charges associated with the selected locations.

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Editing an Existing Tax Rate

1. Navigate to SETTINGS > SETUP > GENERAL SETTINGS > TAX RATES.
2. Select the pencil/edit icon next to the Tax Rate you want to update.
3. Make the necessary changes.
4. Select Save to apply the update.

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Accounting Considerations

Important Notes About Editing Tax Rates

• Tax Rates should only be edited to correct typographical errors in the Name.
• Tax Rates should never be deleted if they are still in use.
• Editing the Rate amount of an existing Tax Rate will:
  • Reassociate all past financial records with the updated rate.
  • Update the tax amount on any existing charges tied to that Tax Rate.
• To preserve financial data integrity:
  • Create a new Tax Rate if the tax percentage changes.
  • Unassign the old Tax Rate from the affected Program and/or Location.

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Location Changes and System Warnings

• If a Tax Rate is removed from a Location, or if a Location is added after charges already exist:
  • The System will display a warning indicating that future charges may be affected.
  • Only new charges created going forward will be impacted.
  • Existing ledger entries are not modified.

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Inclusive Tax

If your pricing structure includes tax within the listed price, review the Inclusive Tax feature to determine whether it better aligns with your billing and reporting needs.

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Financial Reporting

Several financial reports allow you to view tax amounts that have been assessed or collected, including:

• Category List Report (FIN-6)
  • Displays a list of charges over a selected time period.
• Consolidated Tax Report (FIN-11)
  • Shows taxes billed and taxes paid over a selected period.
• Tax Reconciliation Report (FIN-16)
  • Provides a summary of taxes assessed and collected, grouped by program.

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Troubleshooting & FAQs

• Should I edit an existing Tax Rate when the tax percentage changes?
  • No. If the tax percentage changes, create a new Tax Rate and unassign the old one. Editing the rate value affects past financial records.
• What happens if I remove a Tax Rate from a Location?
  • The System displays a warning. Only future charges are affected; existing ledger entries remain unchanged.
• Can I delete a Tax Rate that is no longer used?
  • Tax Rates should not be deleted if they are associated with any financial data. Instead, it is recommended that you create a replacement Tax Rate and associate the new Rate with the proper Location(s).

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Related Articles

• What Is Inclusive Tax?
• How Do I Use the Category List Report (FIN-6)?
• How Do I Use the Consolidated Tax Report (FIN-11)?
• How Do I Use the Tax Reconciliation Report (FIN-16)?

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