Tax Classes

You can set up tax classes that determine either the percentage rate for taxes or a fixed tax value, and how taxes are to be reported in general ledger (GL) postings. Tax classes are referenced from product offer application profiles; the profiles specify how taxes are to be calculated for charges owned by the offer on a per charge application type basis.

Note: You must deselect Use US Tax on Edit Tax Setting to enable Tax Classes.

For more information about application types, see the discussion about when price components can be applied.

Tax classes are associated with product offers and are defined as part of pricing configuration. A tax class specifies either the rate (percentage) to use for calculating taxes or a fixed tax; a tax class cannot include both a percentage rate and a fixed tax. A tax class also contains a Tax Recognition Type that specifies how taxes are to be reported in GL postings. This controls when the tax is recognized in the general ledger. A separate tax class can be assigned to each processing operation that causes pricing to be applied.

When defining a tax class revision, you can optionally specify whether the tax has already been paid by selecting Is Paid and create an additional tax code using the Tax Code field. When IsPaid is true or when TaxCode is specified for a tax class, the values are included in the Event Detail Record (EDR). If a tax charge is applied from a tax class that is defined as already paid, the UpdateType field in the MtxEventCharge EDR is tax_paid_previously.

Each pricing application can be assigned a Tax Inclusive or Tax Exclusive property in a product offer. For pricing that is tax inclusive, you must set up the rates to include the required tax amounts.

If US tax collection is enabled, you can only add CCH tax data. For more information about enabling US tax collection, see the discussion about global system configuration in MATRIXX Configuration. For more information about US taxation, see the discussion about US taxation in MATRIXX Pricing and Rating. For more information about CCH tax data, see the discussion about US tax database in MATRIXX Pricing and Rating.

In addition to the tax classes configured for product offers, the following tax information can be defined for subscribers and groups during object creation or modification and is saved in the wallet. No business logic is associated with these fields, except mapping from the fields in the wallet to the fields in the EDR:
  • TaxStatus — A status chosen by an institution or individual when filing taxes. A taxpayer might fall into more than one category, such as tax exempt.
  • TaxCertificate — A sales tax number issued for institutions or individuals to exempt them from GST in various states. The TaxCertificate value is a string tied to the TaxStatus value, for example, TaxStatus=Exempt. The value is not enforced by the MATRIXX Charging Application and can contain any string.
  • TaxLocation — The locale under whose jurisdiction tax status is defined. Conceptually this is an ISO country code string, but it is not enforced and can contain any string.

The MATRIXX Charging Application generates tax information in the EDRs. Tax IDs shown in the EDR can be used by downstream systems (separate from MATRIXX Engine) to add the tax amounts associated with the charges. If a downstream system will not add the tax amounts, the MATRIXX Charging Application can be configured to add the taxes for the charges. For both tax inclusive and tax exclusive charges, MATRIXX Charging Application shows the balance breakdown of the base charge (the charge amount without the tax) and the tax amount in the EDR. When discounts are applied to the charges, MATRIXX Charging Application shows the tax on the original amount and the tax reduction.

The configuration for MATRIXX Charging Application to add the taxes is done on a per price component application type basis.

The following sample EDR shows tax classification information generated during rating in an environment where the MATRIXX Charging Application is not configured to add the taxes for the charges: 
<MtxEvent>
  <TaxStatus>Exempt</TaxStatus>
  <TaxCertificate>SomeName</TaxCertificate>
  <TaxLocation>971</TaxLocation>
  <MtxEventAppliedOffer> 
     <ProductOfferTaxClassExternalId>12345</ProductOfferTaxClassExternalId> 
     <ProductOfferTaxClassName>Federal</ProductOfferTaxClassName>
     <ProductOfferIsTaxIncluded>True</ProductOfferIsTaxIncluded>
  </MtxEventAppliedOffer> 
</MtxEvent>

where:

  • 12345 is the tax class External ID of the purchased product offer instance for this event type.
  • Federal is the tax class name of the purchased product offer instance for this event type.
  • True indicates the tax inclusiveness of the purchased product offer instance for this event type.

You can add, change, and query the tax information associated with a subscriber or group by using the SubMan APIs. In addition, you can query basic information for all tax class definitions and specific tax class definitions using the tax class TaxClassId or ExternalId. For more information, see the discussions about MtxRequestPricingQueryTaxClassList and MtxRequestPricingTaxClass APIs in MATRIXX Subscriber Management API.

For information about creating product offers and assigning tax classes to the pricing applied by them, see the discussion about product offers. For information about EDR contents, see the discussion about EDR contents in MATRIXX Integration.