Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Authorities

Tax on gross and contributing authorities example

In this example:
  • CA State Sales/Use Tax identifies CA - Excise and CA - Recycling as contributing authorities.
  • CA Excise identifies CA - Recycling as a contributing authority.
  • A purchase of a certain product (Product A) valued at $100 results in a tax liability for each of the 3 authorities: CA - State Sales/Use Tax (a rate of 6.25%), CA - Excise (a rate of 2%), and CA - Recycling (a fee of $1).
  • Determination matches a rule for each authority. The rules for CA - State Sales/Use Tax and CA - Excise use the Tax on Gross and Contributing Authorities calculation methods, while the rule for CA - Recycling uses the Flat Fee calculation method.
  • A transaction is passed into the system including Product A, location data which maps to the 3 authorities, and dates which fall into the appropriate date ranges for the rule and the contributing authorities data.
  • Determination calculates the fee on Product A for CA - Recycling ($1) and adds it to the taxable basis passed to CA - Excise, resulting in a new taxable basis of $101.
  • Determination calculates the tax on the new taxable basis for CA - Excise (2%). The result's a tax of $2.02 and it's added to the taxable basis of $101 for a total of $103.02. This new taxable basis gets passed to CA - State Sales/Use Tax.
  • Determination calculates the tax on the new taxable basis for CA - State Sales/Use Tax (6.25%). The result is a tax of $6.44 and it's added to the taxable basis of $103.02 for a final gross amount of $109.46.

This article applies to:

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