Tax Fees

Tax fees are fixed values assessed regardless of the charge amount and are calculated based on UnitType. The unit type specifies what is being taxed: access line, account, transaction, telephone number, or per subscriber. For example, a 911 fee is applied per access line. US taxation supports tax fees for non-usage charges only.

Some US taxes define a specific tax amount and maximum fees that can be collected. This is defined as MaxTax in the CCH tables MATRIXX Engine uses to determine taxes and fees. For more information about MaxTax and CCH tables, see the discussion about US taxation.

Set up tax classes in My MATRIXX to determine a tax fee value and how taxes are reported in general ledger (GL) postings. For more information about setting up a tax fee value, see the discussions about tax classes and creating a tax class in My MATRIXX Help.

When defining a balance template for a currency balance in My MATRIXX, if Actual Currency is selected, you can specify whether an actual currency balance can be used to pay for tax fees using the Prohibited for Tax Fees option. Select Prohibited for Tax Fees to prevent the actual currency balance from being charged tax fees. When the Charging Server calculates taxes on a charge, if the balance cannot be charged tax fees, the Charging Server does not apply tax fees to that balance and attempts to charge the tax fees for the transaction to a different balance. If there are no valid currency balances to pay tax fees, an error displays.

When applying charges, constant charges are applied before scale charges. If the impacted balance is taxable, tax fees are applied before any charges. If this balance has insufficient credit available to cover all tax fees, all available credit of the balance is used to cover the tax fees. Any tax fees that remain (uncovered) are applied to the next taxable balance, until all tax fees are applied. Constant charges are applied with rate-based taxes, then the non-constant charges are applied with rate-based taxes.

The following rules apply to tax fees:

  • Tax fees apply to actual currency balances only.
  • Tax fees are not applied until the first taxable balance is impacted.
  • If all impacted balances are not taxable, taxes are not applied.
  • Tax fees are applied once per transaction.
  • Discounts do not affect tax fees.
  • Proration (purchase/cancel) does not affect tax fees.

Tax Inclusive Pricing Example 1

In the following example, there is no discount, one tax rate, one tax fee, and one impacted balance:
  • Charge = 4.50
  • Tax fee = $0.75
  • Tax rate = 25%
Figure 1. Tax Inclusive Pricing Example 1
Example 1: No discount, one tax rate, one tax fee, and one impacted balance.

Tax Inclusive Pricing Example 2

In the following example, there is a percentage discount, one tax rate, one tax fee, and one impacted balance.
  • Charge = $5.00
  • Discount = 10%
  • Tax fee = $0.75
  • Tax rate = 25%
Figure 2. Tax Inclusive Pricing Example 2
Example 2: Percentage discount, one tax rate, one tax fee, and one impacted balance