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Evaluation of contributing authorities example

Evaluating contributing authorities example

Once Determination interprets that a rule selected for a transaction specifies one of the contributing authority calculation methods, it determines which authorities are relevant to a transaction and builds a list of authorities to evaluate for contributing authority relationships.
In the following 2 examples:
  • CA State Sales/Use Tax identifies CA - Excise and CA - Recycling as contributing authorities.
  • CA Excise identifies CA - Recycling as a contributing authority.

Example 1

  • Determination interprets that CA State Sales/Use Tax and CA - Recycling are relevant to a transaction and that the relevant rules use the Tax on Gross and Contributing Authorities calculation method.
  • Determination calculates the fee associated with CA - Recycling and includes it in the taxable basis for CA - State Sales/Use Tax.
  • Determination calculates the tax for CA - State Sales/Use Tax based on the modified taxable basis.
  • CA - Excise isn't considered in this transaction, even though it is listed as a contributing authority to CA - State Sales/Use Tax.

Example 2

  • Determination interprets that all 3 authorities are relevant to a transaction and that the relevant rules use the Tax Gross and Contributing Authorities calculation method.
  • Determination calculates the fee associated with CA - Recycling and includes it in the taxable basis for CA - Excise.
  • Determination calculates the tax associated with CA - Excise based on the modified taxable basis and includes it in the taxable basis for CA - State Sales/Use Tax.
  • Determination calculates the tax for CA - State Sales/Use Tax based on the modified taxable basis, which now includes both contributing authorities.

This article applies to:

  • Product: ONESOURCE Determination, ONESOURCE Indirect Tax
  • Subject: Authorities