Compounding sales and service taxes calculations
Some taxing authorities may require compounding taxes, such as several locations in Canada. A sales or service tax is first assessed by the state or province, and a local tax is then assessed on the combined total of the original amount and the 1st assessment.
To create this scenario in Practice CS, you'll need to create 2 separate taxing authorities. Create the first or primary taxing authority as normal. The amount of the tax rate is the actual tax rate.
The 2nd or compounding tax rate will need to be set up using a modified amount. You will need to calculate the adjusted tax rate to compensate for the primary tax's inclusion. The formula is:
(100 + (1st Tax Rate * 100)) * 2nd Tax Rate
