Table of Contents
Taxes Setup
Updated
by Mitchell Paul-Soumis
Tax Creation in Sonar
Tax creation requires 4 fields be filled out: Name, Application, Rate, and Type.
- The name section is what appears on the invoice and on the account
- The application indicates whether it should be a flat rate, or a percentage of the sum which is applied as taxes,
- The rate is the amount (so 5 would be either 5 dollars or 5 percent depending on the application selection) and finally
- The type picker allows you to set if it's global to every customer, or dependent on a certain geographical zone.
Once created, a Global Tax is done here - it's applied to all customer accounts in your instance. Geographical taxes will require additional configuration.
Geographical Taxes Extra configuration
When you create a Geographical Tax in Sonar, you then need to configure a Geo Tax Zone
Configuring a Geo Tax Zone will only tax the residents of that zone, and configuring the actual zone itself is very flexible. The only mandatory fields are the Name and the Rate.
Multiple Service Zone configuration
While Sonar does support integration with Avalara for automated taxation, the software is designed to be robust enough to enable you to create multiple layers of taxation that appear on a line-by-line basis during transactions.
When you provide service to customers in multiple cities, counties, or states, you will need to ensure you have all the layers built. Rate-building occurs on a size basis, starting from the broadest service area to the smallest. As you can see below, the taxes were built in the following order:
- State Tax
- County Tax
- City Tax
The way this system works together allows you to nest multiple Geo Tax Zones within one layer, such as in the case of distinct cities within Colorado:
By nesting these cities under a single Geographical Tax, you minimize not only the number of items, but the number of taxes applied to a service.
Finally, with the taxes configured in this nested manner you and your customers will be able to see all taxes leveraged against the service as it's charged and invoiced.
On the customer's transactions:
Statement Example:
