IN THIS ARTICLE:
Learn about Tax Rates, how they are applied to charges in iClassPro, and how to create/edit them.

• What is a Tax Rate?
• Creating a new Tax Rate
• Editing an existing Tax Rate
• Accounting Considerations
  • Inclusive Tax
  • Financial Reporting

What is a Tax Rate?

Tax rates define a percentage to be added to specific charges and vary by nations, states, provinces, counties, and municipalities. A charge can be specified as taxable or non-taxable when creating it.

Creating a new Tax Rate

1. Navigate to SETTINGS>SETUP>GENERAL SETTINGS>TAX RATES.
2. Click on Add New Tax Rate.
   
3. Enter a Name and Rate (without the percentage sign) and select the location(s) where the Tax Rate should be applicable.
   
4. Click Create to save the new Tax Rate.

Editing an existing Tax Rate

To edit an existing Tax Rate, click on the pencil/edit icon next to the Tax Rate and make any necessary changes.  Be sure to click Save when you are finished.

Tax Rates should only be edited to correct a typographical error in the name, and should never be deleted when they are still in use. Because Tax Rates are associated with financial information, editing the Rate amount of an existing Tax Rate will associate all past financial records with the new Tax Rate instead. If you edit an existing charge tied to the old tax rate, the tax amount will update to use the new rate instead.

If a tax rate needs to be updated, you will need to create a new tax rate, then unassign the old one from the Program and/or Location to maintain data integrity.

NOTE: if a tax rate has been associated with a Location but is later removed (or if a Location is later added after charges have already been created for that Location), the system will present a warning alerting the staff member that doing so will affect any new charges created for that Location. This will only affect future charges that are created; it will not affect any existing ledger entries.

Accounting Considerations

Inclusive Tax

If your prices are tax-inclusive, we recommend reviewing iClassPro's "Inclusive Tax" feature to see if it will work better for your billing/reporting needs.

Financial Reporting

When running financial reports, some reports will allow you to view tax assessed. Primarily, these include:

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