Taxes can be automatically calculated at the time of invoicing by setting up Products as taxable. The taxes can then be displayed in the Invoices & Invoice PDF. Taxes provide a simple way to apply tax rates based on a Customer Account’s Ship To Contact address, specifically referencing the Country, State, City, Zip, and Country.

Read more about: 

• Tax Rules
• Product Tax Groups

Tax Management

Ordway stores tax rates based on geographical location. To accurately and legally report taxes, a Tax processor is required. Ordway offers an Avalara AvaTax integration. Avalara is a cloud-based solution automating transaction tax calculations and the tax filing process. Read more about Avalara.

Avalara Note: Avalara calculates the taxes based on the Shipping Address. However, shipping address comes from Company Address saved in Avalara. Make sure the Company Address in Avalara is accurate including Country and Zip Code to properly calculate taxes.

Tax Application Parameters

Note: Three conditions must be met in order for taxes to appear on invoices. When one or more of these three conditions are not met, taxes are not included on invoices. 

1. Product must be marked Taxable. Learn more about managing Products. 
2. Customer Account must not be tax-exempt. Learn more about managing Customer settings. 
3. Tax setting must exist for the corresponding geographical location (country, city, state, or zip code). Establish a new tax by following the steps below. 

Customer Not Tax-Exempt

Steps:

1. Navigate to Menu > Customer Accounts.
2. Open the desired Customer account.
3. Ensure that Tax-Exempt is toggled off.
   

Manage Tax Rules

Add New Tax

Steps:

1. Navigate to Menu > Setup > Tax Rules.
   
2. Click Add.
3. Enter a Tax ID.
4. Enter a Tax Label which will be displayed in Invoices such as DC Sales Tax.
5. Enter a decimal to specify Tax Percent such as 5.75%.
6. Populate additional fields such as Country, State, City, Zip, and County where this tax is applicable.

Important! Be consistent when including geographical information. Example: If a Customer has a shipping address that lists NYC as the city, but the Tax lists New York City; these two entries do not match and will result in incorrect tax application. It's best to establish a best practice within your organization on how to identify geographical locations including city, state, and corresponding billing data that can be labeled multiple ways. This ensures that all functions within Ordway run smoothly.

Examples:

• When a State level tax is saved in Ordway, the tax is automatically applied to any city within the State.
• When both a State and City level tax are required, create two separate taxes to account for both the State tax and City tax separately. Example: The State of Maryland and the City of Baltimore.

6. Toggle the Status to Active (toggle appears green) when ready for use.

7. Click Save.

Edit Taxes

Steps:

Navigate to Menu > Setup > Tax Rules.

• Click the Edit icon to edit content.
• Click the Trash Can icon to delete the tax item.
• Click the Refresh icon to view audit logs for that tax item.
• Use the Import Taxes option from the More menu to import Taxes.
• Use the Export Taxes option from the More menu to Export Taxes.

Make Existing Product Taxable

Steps:

1. Navigate to Menu > Plans & Charges > Products.
2. Click Edit for the desired Product from the Gear icon to edit the Product. 
3. Toggle Taxable On.
4. Click Save.

Manage Taxes via Import/Export

These additions or edits can also be done in bulk. 

Please see our Import & Export Data documentation. Reference our Walkthrough: Traditional Import article on how to Import Taxes.

Product Tax Groups

Ordway supports tax configuration with grouping by product; i.e. tax code per product, allowing for separate tax calculations by product.

A Product Tax Group can be added to tax rules and applied to a product or a group of products. For example, you may have separate tax rates for physical products and software services. 

A field named Product Tax Group will display on the Product and Tax Rules pages respectively.

New Product Tax Group page:

New field Product Tax Group appears on the Edit Taxes page: 

New field Product Tax Group on Products page: 

Add Product Tax Group

Steps:

1. Navigate to Menu > Setup > Product Tax Group
   
2. Click Add.
3. Populate the Product Tax Group Name.
4. Add additional Notes as needed. 
5. Toggle Active to Yes.
6. Save.