Custom product tax categories (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 chose 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, when sold to Ohio customers.

• Received letter rulings from a jurisdiction — You have received letter rulings from specific states that indicate their specific product is taxable/not-taxable, in contrast to the more general rules.
• Product tax configuration (PTC) not currently supported by Anrok — You have products that Anrok does not currently have a code that exactly matches the taxability of their product. A product tax configuration (PTC) can be used to support their product within Anrok.

How custom PTCs work

Custom product categories (PTC) will have a base PTC 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 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 the your custom product category (PTC).

Setting up a custom PTC

To create a custom product tax category (PTC) that meets your specific business needs, you'll need to complete the Custom PTC Taxability Matrix template (attached to the end of this article). This process will allow you to define jurisdiction-specific tax rules that override the standard taxability settings for your chosen base PTC.

1. Download the Custom PTC Taxability Matrix template(attached to the end of this article).
2. In the Custom PTC Taxability Matrix template, enter your Seller_Name and Seller_ID. Your Seller_ID can be found in your Anrok account's URL. It will look like the green text in this example: https://app.anrok.com/k3nxvhp9m2r/dashboard.
3. Select the Base_PTC you wish to use for your custom tax category (PTC) (e.g., "SaaS, Business" or "Cloud services, Consumer").
4. Enter a Custom PTC Name for your custom tax category (PTC). Anrok will automatically format your custom PTC as “Custom — Base_PTC — Custom PTC Name”. For your Custom PTC Name, do not repeat the base PTC or that this is custom in the name.
5. For each juris_Id, edit the following information:
   • date_begins — The effective date of the taxability override in the jurisdiction.
   • date_ends (Optional) — The end date of the taxability override in the jurisdiction.
   • Customer_Taxability_Override — Enter T if the custom PTC is taxable in the jurisdiction or E if the custom PTC is non-taxable in the jurisdiction.
6. Submit this form and attach the completed Custom PTC Taxability Matrix template.

After your request form has been submitted, our team will notify you when the custom PTC has been created or if we require any additional information.

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 you can then re-configure your product IDs with the custom PTC.