Tax Rates

Tax Rates define the tax percentage applied to materials for tax-inclusive cost calculation. Like the other rate tables in Setup, a tax rate can supersede an older one without erasing it.

Why Tax Rates Matter

• Accurate landed cost — materials priced tax-inclusive reflect what the project actually pays
• Regional accuracy — different jurisdictions and material types can carry different rates
• Non-destructive updates — when a tax rate changes, the old rate isn’t overwritten; it’s superseded

How Tax Rates Work

Each tax rate has a percentage value, an active flag, and an optional default flag. A tax rate can optionally point to a parent tax rate it supersedes — this keeps the previous rate on record instead of silently rewriting it, so past estimates still explain themselves under the rate that applied when they were built.

Materials reference a tax rate directly. When a material’s cost is calculated, its tax rate is applied on top of the base price.

Creating a Tax Rate

1. Go to Config → Tax Rates
2. Click New Tax Rate
3. Enter the rate percentage
4. Mark it Active, and Default if it should apply automatically to new materials
5. Save

Superseding a Rate

When a tax rate changes (a new fiscal year, a regulatory update):

1. Create a new tax rate with the updated percentage
2. Set the new rate’s parent to the rate it replaces
3. Mark the new rate Active and Default; the old rate stays on record, inactive

Materials already priced under the old rate keep their history intact.

Best Practices

• Set one default tax rate before adding materials, so new materials aren’t left unclassified
• Use supersession instead of editing a rate’s value in place when the change reflects a real point in time
• Keep tax rate names or notes descriptive enough to explain which jurisdiction or material class they apply to

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Next: Expense Types