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Tax Areas

Overview​

Every office location within the system must have an assigned tax area to ensure accurate tax calculations for products included in cases. Tax areas define the applicable tax rate and jurisdiction for products sold from each specific office location.

Purpose of Tax Areas​

Tax areas serve a critical function in the billing system by:

  • Calculating Tax Amounts: The system uses the assigned tax area to automatically calculate the appropriate tax amount for products on each case
  • Ensuring Compliance: Tax areas help maintain compliance with local and state tax regulations
  • Streamlining Operations: Automated tax calculations reduce manual errors and processing time

Tax Area Requirements by Location​

United States Tax Requirements​

Tax area creation and assignment depends on the legal tax requirements for the state where your office is located:

California Offices:

  • Tax areas with applicable tax rates are required for all California office locations
  • California state law mandates tax collection on the products and services offered by dental laboratories
  • Failure to assign a proper tax area will result in non-compliance with state tax regulations

All Other US States:

  • Tax area assignment is optional based on local tax requirements
  • Review your state and local tax obligations to determine if tax collection is required
  • Consult with tax professionals if uncertain about your obligations

Creating Tax Areas​

When Tax Collection is Required​

If your office location is required to collect taxes on products:

  1. Create a tax area with the appropriate tax rate for your jurisdiction
  2. Configure the tax rate to match local, state, and any applicable municipal tax requirements
  3. Assign this tax area to the corresponding office location
  4. Verify that the tax calculations are working correctly for test cases

When Tax Collection is Not Required​

If your office location is not required to collect taxes:

  1. Create a tax area with a 0% tax rate
  2. Assign this zero-rate tax area to your office location
  3. This ensures the system can process cases without applying tax charges

Important Note: Even when tax collection is not required, you must still assign a tax area to each office. Creating a 0% tax area satisfies this system requirement while ensuring no tax is charged.

Best Practices​

Tax Area Management​

  • Regular Review: Periodically review tax rates to ensure they remain current with local regulations
  • Documentation: Maintain records of when and why tax rates were established or modified
  • Professional Consultation: Consult with tax professionals when setting up tax areas to ensure compliance

Compliance Considerations​

  • Monitor state and local tax law changes that may affect your obligations
  • Consider consulting with tax professionals for complex multi-jurisdiction situations

Troubleshooting​

If you encounter issues with tax calculations:

  1. Verify that the office has a tax area assigned
  2. Confirm that the tax rate in the tax area is correct
  3. Check that products are properly configured for tax calculation
  4. Review case line items to ensure tax amounts are being calculated correctly