Sales Tax Example: Multiple Sales Tax Rates Applied to Same Order

For this example, assume that Pennsylvania state charges a sales tax rate of 1% on food products and a 6% sales tax rate for all other taxable goods and services. In Aptify, Pennsylvania state would have two Sales Tax Rate records, and each record would have an Order Line Filter Rule to determine the set of products to which a rate applies.

Important Note

This topic uses sample Sales Tax Rate records for Pennsylvania state and Philadelphia county to illustrate the sales tax functionality provided by Aptify and to illustrate how changing one or more fields can modify the sales tax behavior. These examples are not intended to reflect the actual requirements for these tax jurisdictions. Refer to Pennsylvania state's Web site (http://www.state.pa.us/) for information on its sales tax policies.  

The 1% Sales Tax Rate on food products might have a filter rule such as apply to products whose Root Product Category is Food (as shown in the figure below). See Specifying Order Lines Filter Rules for more information on creating Filter Rules.


This record would also have the Stop Accumulation for Tax Jurisdiction option selected and a lower number in the Rank field than the general 6% Sales Tax Rate (as shown below).

Then, the general 6% Sales Tax Rate would have a higher number in the Rank field (1, as shown in the figure below). Since the system evaluates tax rates in Rank order, it will start with the Food Tax record, since it has the lower rank. In this case, any food products will have the 1% food rate applied, and then the evaluation stops. If a product is not in the food category, the 1% food tax does not apply and the system continues the evaluation, applying the general 6% rate.

When a customer in Pennsylvania places an order that includes a food product and a non-food product, Aptify automatically applies the appropriate sales tax rate to each order line.
In the figure below, a customer in Bucks county, Pennsylvania places an order for 10 units of Food Products (at $5/unit) and 1 unit of Taxable Products (at $100/unit).

The total tax on the order is $6.50: Aptify applies the 1% sales tax rate to the food product (for $0.50 in tax) and the 6% rate to the non-food product (for $6.00 in tax), as shown in the figure below.