Create a custom product tax category (PTC)

Introduction

A custom product tax category (PTC) allows you to override the taxability determination for a specific jurisdiction or create an entirely new set of determinations. You may have many reasons for creating a custom product tax category (PTC):

• State-specific category preferences — You want to use custom product tax categories (PTC) as a technical solution to automatically handle complex, state-specific tax rules for your products, making compliance easier for both you and your customers.

  For example, in Iowa, SaaS is exempt for B2B, provided an exemption certificate is on file. However, many customers choose to alleviate this burden for their customers and create custom product tax categories (PTC).

  Similarly, in Ohio, SaaS is taxable, but there are certain healthcare exceptions to this taxability. Some healthcare customers have a custom product tax category (PTC) so that their products are exempt when sold to Ohio customers.

• Received letter rulings from a jurisdiction — You have received letter rulings from specific states that indicate a specific product is taxable or not taxable, in contrast to the more general rules.
• Product tax configuration (PTC) not currently supported by Anrok — Anrok doesn't have built-in tax codes that exactly match some of your products. A product tax configuration (PTC) can be used to support your product within Anrok.

How custom PTCs work

Custom product categories (PTC) will have a base tax category within Anrok (e.g., "SaaS, Business" or "Cloud services, Consumer"). You will then make alterations to the base PTC's taxability by state or country. Keep in mind that:

• Anrok will never adjust the taxability of a custom setting — When you change the taxability of a product in Georgia, Anrok will never adjust that setting, even if Georgia has a law change that could impact that base PTC.
• Anrok will push any law changes to unchanged jurisdictions in accordance with the base PTC — When you are using a base PTC for a custom product category (PTC) but have not configured this code to modify a specific jurisdiction, such as California, if California has a law change impacting that existing base PTC, that change will automatically be pushed to your custom product category (PTC).

Set up a custom product tax category

You can create a custom product tax category (PTC) to apply to your product IDs with unique tax classifications.

Try creating a custom product tax category in the demo above ☝️

1. In the Anrok app , go to Product IDs. Take me there!
2. Select View custom tax categories, then click Create.
3. Enter the Name and Base tax category.
4. Review the base taxabilities, then click Continue. 
5. Click Add override, then fill in the following:
   • Jurisdiction
   • Override taxability
   • Start date
   • End date
6.  Click Add override. Repeat this step for each jurisdiction you want to override.
7. When you are finished, click Continue, then click Submit.

Using a custom PTC

Once a custom product category (PTC) has been created, if you do not have pre-existing product IDs in Anrok that require the custom PTC, you can now set up new product IDs with the custom PTC.

If you have pre-existing product IDs in Anrok that you want to replace with your custom PTC, you will first need to archive the product IDs you want to replace. Once archived, you can then re-configure your product IDs with the custom PTC. They will commonly be listed under the Custom Product type.