Select a tax configuration

When configuring a new product ID  in Anrok, you must first identify the product or service's Product type. When selecting a Product type, you must determine the primary type of customer you will sell the product or service to. During selection, you will have the following options:

• B2B — A product or service primarily sold to other companies. 
• B2C — A product or service primarily sold directly to consumers.
• N/A — These are line-item charges that are not subject to sales tax. These items typically would include reimbursements or other pass-through charges to customers.

For non-US sales, your customer's VAT ID will determine whether tax is applied. Setting the expectation of whether the sale is B2B will allow Anrok to alert you if a VAT ID is potentially applicable but missing on a transaction. See What is a VAT ID or VRN?

Once you've selected a Product type, you will need to identify the product or service's Tax category. When selecting a Tax category, you need to determine the description that best fits your product or service. Anrok provides support for the following catalog of products and services:

SaaS

• General — Pre-written software, delivered electronically. You provide customers with access to a hosted software application, which is described as computer programs designed to enable the user to perform a group of coordinated functions, tasks, or activities. You are typically responsible for all aspects of making the software service available. This includes deploying, configuring, maintaining, and updating the operation of the software applications on a cloud infrastructure, whether included in the cost of the software or charged as a separate line item.
• Security —Pre-written software, delivered electronically, designed specifically to provide protection of computer systems, software, or data against unauthorized access or intrusion. This includes separately charged maintenance and updates delivered electronically, whether included in the software cost or billed as a separate line item.
• Storage — Pre-written software, delivered electronically, designed purely as storage for a customer's data. You provide customers access to a software product solely to facilitate the storage of digital products, digital codes, computer software, or master copies of software. This includes separately charged maintenance and updates delivered electronically, whether included in the software cost or billed as a separate line item.
• On-prem — Pre-written software, delivered electronically, hosted on infrastructure owned, leased, or otherwise directly managed by your customer. You provide customers with access to a software application, which is defined as computer programs designed to enable the user to perform a group of coordinated functions, tasks, or activities. The customer is responsible for the infrastructure on which the software will be deployed. It is assumed that the customer's tax address is the location of the infrastructure. This includes separately charged maintenance and updates, whether included in the software cost or billed as a separate line item.

PaaS

• General — A cloud computing service bundle that includes both the infrastructure - servers, storage, and networking - and the middleware - development tools, business intelligence (BI) services, database management systems - that provides the customer a complete development and deployment environment in the cloud.

People services

• Professional services - Mandatory — Service agreement for mandatory services related to hosted software. Non-automated, people services to assist a customer onboard, deploy, and troubleshoot a SaaS product. Services must be listed as a separate line item to apply independent tax configurations. The services are mandatory. Certain states may tax a product differently depending on whether services are mandatory or optional.
• Professional services - Optional — Service agreement for optional services related to hosted software. Non-automated, people services to assist a customer onboard, deploy, and troubleshoot a SaaS product. Services must be listed as a separate line item to apply independent tax configurations. The services are optional. Certain states may tax a product differently depending on whether services are mandatory or optional.
• General services — Non-automated, people services that may be sold on a stand-alone basis.
• Training - Mandatory — Incidental training services agreed to be rendered as part of the sale of software (bundled).
• Training - Optional — Non-automated, people services provided remotely to train users (stand-alone).
• Implementation services — Non-automated people services are provided remotely to assist purchasers in the implementation of a corresponding SaaS or digital product.

Employment services

• General — Employment agency services, personnel services, and recruiting services on a permanent or short-term basis.

Cloud services

• General — Infrastructure as a service offering, providing users with remote access to data center equipment and computing power.

Digital services

• Information services — Services delivered electronically that allow information and data to be generated, acquired, stored, processed, or retrieved and delivered electronically to a purchaser.
• Data processing — Products that are primarily designed to process data provided by users into an alternate form using a computer. Data processing includes the process of entering, manipulating, or retrieving a customer's data and providing access to that data in digital format.
• Web-hosting — Internet hosting services that host websites for customers. These services may include facilities for customers to create and maintain their own websites, as well as email hosting services.
• Domain name sales — The sale of and registration services associated with IP addresses (domain names).

Digital goods (Subscription)

• General — You provide customers access to photographs, audiovisual works, audio works, and books, delivered electronically to a customer for non-permanent access, with the right of use conditioned on continued payment to the seller.
• Gaming — Cloud-based or downloaded access to digital gaming services.
• Video — Cloud-based or downloaded digital video access, available by subscription, may include movies, television shows, or other video content.
• Photography — Cloud-based or downloaded digital photographs. It may also include photography services.
• Music — Cloud-based or downloaded digital audio files.
• Digital tokens/in-app purchases — Digital products purchased in-app. These purchases are limited to use within the app, and are not redeemable for cash, and are not a cash equivalent.
• Data sets — Compilations of data purchased in a user-friendly format.

Digital goods (Permanent)

• General — You provide customers access to photographs, audiovisual works, audio works, and books, delivered electronically to a customer.
• Gaming — Cloud-based or downloaded access to digital gaming services, with rights of permanent use by the customer.
• Video — Cloud-based or downloaded digital video access for permanent use may include movies, television, or other video access.
• Photography — Cloud-based or downloaded digital photographs are for permanent access by the user. The photography services may also be included as part of the overall price.
• Music — Cloud-based or downloaded digital audio files are sold for permanent access by the end user.
• NFTs — Non-fungible tokens sold for permanent use; these may include digital artwork or other similar custom digital goods. This does not include any crypto-currencies.
• Digital tokens/in-app purchases — Digital products purchased in-app for permanent use. These purchases are limited to use within the app and are not redeemable for cash and are not a cash equivalent.
• Data sets — Compilations of data purchased in a user-friendly format for permanent use.

Shipping/Handling

• Postage charges — Mandatory separately stated charges by a third-party passed on to buyers for postage applied to direct mail (note this does not include the sale of postage/stamps as stand-alone items).
• Packaging materials — Items used by a third-party to package tangible personal property - e.g., tape, boxes, bubble wrap, crates, etc.
• Packaging services — Mandatory and separately stated service charge for third-party packaging services (does not include the price of packaging materials).
• Freight loading/unloading — Mandatory and separately stated service charge for third-party freight loading and unloading in connection with the sale of tangible property.
• Shipping & Handling — Mandatory and separately stated charges for shipping & handling that include the cost of third-party transportation plus any additional charges for special handling paid to the seller.
• Shipping — Mandatory and separately stated charges for shipping that include the cost of transportation for tangible personal property paid to the seller.

Consumer Electronics

• Portable electronics — Common consumer electronics such as handheld video game systems, radios, docking stations, video cameras, calculators, e-book readers, headphones, etc. Excludes: Telecommunication and medical devices.

Hardware

• Printer — Printer ink and toner, typically used in conjunction with computer electronics.
• Desktop computer — Fixed programmable machine or device with capabilities for information processing. Includes Monitor, programmable microprocessors, and other integrated circuits embedded in the equipment.
• Laptop/tablet computer — Portable programmable machine or device with capabilities for information processing. Includes programmable microprocessors and other integrated circuits embedded in the equipment.
• Computer accessories — Computer accessory supplies, such as a mouse, CPU, keyboard, speakers, etc.
• Servers — Centralized computer hardware that controls and provides information to other computers in a network.
• Replacement parts — A physical component to an existing assembled product. Excludes parts for prescription, medical, and manufacturing machinery.

Clothing

• Clothing — General clothing items such as t-shirts, sweatshirts, shorts, etc.
• Accessories — Accessory items such as sunglasses, baseball caps, etc.

Warranties & Maintenance

• Service contract for goods (optional) — Optional service contract for tangible personal property that is purchased with the property at the discretion of the buyer. The contract may include repair, maintenance, or other services or materials needed for the repair of the accompanying TPP.
• Service contract for goods (mandatory) — Mandatory service contract for tangible personal property that is required to accompany the purchase of the covered property. The contract may include repair, maintenance, or other services or materials needed for the repair of the accompanying TPP.
• Warranty contract for goods (optional) — Separately stated charge for an extended warranty for the repair or replacement of tangible personal property for a specified period of time.
• Warranty contract for goods (mandatory) — Separately stated charge for a warranty for the repair or replacement of tangible personal property for a specified period of time.
• Maintenance agreement for goods (optional) — Optional maintenance contract for tangible personal property that is purchased with the property at the discretion of the buyer. The contract may include a regular cadence for on-site service and maintenance of the property purchased.
• Maintenance agreement for goods (mandatory) — Mandatory maintenance contract for tangible personal property that is required to accompany the purchase of the covered property. The contract may include a regular schedule for on-site service and maintenance of the purchased property.

Other

• Business expenses — Generally, non-taxable pass-through expenses, with the exception of the Hawaii general excise tax.
• Downloaded software — Prewritten, non-custom computer software that is delivered electronically for download onto customers' devices/servers. No tangible personal property (e.g., CD-ROM, etc.) is delivered or used in conjunction with the download.
• Software maintenance automated - optional — An agreement to furnish maintenance services, upgrades, enhancements or updates of prewritten software, which may include an agreement for service, repair, and maintenance of computer hardware via cloud/online and automated (no physical service). The agreement must be optional, meaning the maintenance agreement is not contingent upon purchase of the underlying prewritten software.