Calculate Taxes with Stripe Tax Integration

This article outlines how Nue seamlessly integrates with Stripe Tax, enabling users to achieve accurate tax calculations for quotes, orders, invoices, and credit memos while ensuring compliance. It explains the configuration process for this integration in detail.  Let's get started!

 

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PERMISSIONS REQUIRED   To manage Stripe integrations, users need the following permissions:    Integrations Manage Stripe Integration

Setup Stripe Integration

Users can follow the steps here to setup the Stripe connection.  

 

Configure Stripe Tax

Users can enable Stripe Tax with the following options: 

• Enable Stripe Tax for quotes and orders
  
  • If enabled, taxes will be calculated for quotes and orders.
• Enable Stripe Tax for invoices and collections
  • If enabled, taxes will be calculated for invoices, credit memos and collections. 

 

Please note that you may only use one Tax provider.  For instance, if you currently have Stripe Tax Tax as your chosen tax provider and you decide to enable Stripe Tax, you will be prompted to disable Stripe Tax Integration before enabling Stripe Tax.

Configure Tax Codes

Once Stripe Tax is enabled, taxation is enabled in Nue.  Transactions are subject to taxations according to the tax codes associated to the products or services involved in the transactions.  

 

Stripe offers an extensive range of tax codes catering to various businesses. However, most companies require only a limited set of tax codes for their operations. Nue simplifies this process by providing a convenient way to restrict the available tax codes, ensuring your company can easily select and use the necessary ones.

 

You can find the entire list of tax codes supported by Stripe here.  

 

To configure a set of Tax Codes to select and use for your company, login to Nue App and navigate to Revenue Manager → Tax Codes. 

• Click New Tax Code, and enter Name, Status, Tax Code, and Description.  
  • Name: The tax code name used in your company.  For example, 'Core Platform'.  
  • Tax Code: Copy the Stripe Tax Code
  • Description: Enter your own description or copy the Stripe Tax Code description.
  • Status: Set the status to Active to be used by the product catalog.  You can switch the status to be inactive if this tax code is no longer used.  
• Click Save.

NOTE   If the Nue tax code is inactive, it cannot be selected or used by any product in the product catalog. Nonetheless, the tax code will still be applied for tax calculations in existing products until admin users explicitly modify the tax code on these products.

 

Configure Tax Information for Products

To configure tax information for products, you can follow the steps below: 

• Login to Nue App and navigate to Price Builder → Product Catalog
• Click to edit a product or bundle product.
• You should see 2 tax related fields: 
  • Tax Mode: "Tax Mode" refers to the method used to calculate and apply taxes to product prices or transaction amounts. There are two primary tax modes: Inclusive and Exclusive.
    • Inclusive: Inclusive tax mode means that the tax amount is already included in the price of the product or service. 
    • Exclusive: Exclusive tax mode means that the tax amount is added on top of the price of the product or service at the time of purchase.  This is the default value.  
  • Tax Code: This refers to Nue Tax Code you created in the last step.  For example, you can select 'Core Platform'. Only active tax codes are available to use.
• Click 'Save and Exit'. 

 

Calculate Taxes for Quotes and Orders

In an automated tax calculation system like Stripe Tax, once a product is associated with a specific Tax Code, it means that the product is linked to a predefined tax treatment, such as a particular tax rate or exemption status. When a transaction occurs, the tax amount applied to that product will be determined by several factors, including:

1. Shipping Address: The tax rate may vary depending on the location of the customer's shipping address. Different jurisdictions have different tax rates and rules, and the tax calculation will consider the applicable rate based on the customer's location.

2. Transaction Date: Tax rates can change over time due to legislative updates or other factors. Therefore, the date of the transaction is considered to ensure that the correct tax rate at that specific time is applied.

3. Tax Code of the Product: As mentioned, the product's Tax Code defines how it should be taxed. It may have different tax treatments based on its category, usage, or any applicable tax exemptions.

When users create a quote or an order, they can enter Billing Address and Shipping Address in the General Informations step.  For example: 

 

After users add products to the quote or order in the Line Editor step and click Quick Save, the taxes will be automatically calculated and shown in both the Price Summary and each line item.

 

 

Please note that: 

• When the Tax Mode is Exclusive for a product, the Total Amount is the sum of the Total Price and the Tax Amount.
• When the Tax Mode is Inclusive for a product, the Total Amount is equal to the Total Price.
• If the quote or order contains both Tax Exclusive and Tax Inclusive products, the Total Amount in the Price Summary may not be equal to the sum of Total Price and Total Amount, due to different tax treatments for various products.

Additionally, users can view the detailed breakdown of taxes by clicking on the 'Tax Breakdown' icon located in the price summary section. In the summary view, the Tax Amount, Taxable Amount, and Tax Rate for the current quote or order will be displayed. In case users require more information, they can expand the tax summary to a full view of the tax breakdown list in a popup window, which will display all the relevant details, including tax code, type, and region information.

 

Shipping Address

If there is no shipping address entered in the quote or order, the shipping address of the customer will be used.  If there is no shipping address of the customer, and there are products subject to taxations, a warning sign will be displayed next to Tax and Total Amount fields in the price summary, indicating the shipping address is required.

 

The taxes will be recalculated when users click Quick Save or Save and Exit.

 

Calculate Taxes for Invoices and Credit Memos

When an order is activated, invoices and credit memos may be generated upon order activation or in a billing schedule job.  The billing engine will also calculate taxes according to the tax code, tax mode, invoice date and shipping address of the associated order or customer.  

 

During the billing process, the following fields on Invoice and Invoice Item, Credit Memo and Credit Memo Items will be calculated: 

 

OBJECT	FIELD	DESCRIPTION
Invoice	Tax Amount	The total tax amount of all invoice items in the invoice
Invoice	Amount Without Tax	The total transaction amounts of all invoice items.
Invoice	Invoice Amount	The total invoice amount aggregated from Invoice Items.  For tax inclusive products, the invoice amount is the same as the transaction amount.  For tax exclusive products, the invoice amount includes the transaction amount plus the tax amount.
Invoice Item	Tax Amount	Tha tax amount of the invoice item.
Invoice Item	Transaction Amount Without Tax	The taxable amount of the invoice item.
Invoice Item	Transaction Amount	The total amount of the invoice item. The transaction amount includes the taxable amount plus the tax amount.

 

The tax calculation details will be grouped based on the Tax Rate and Tax Mode of each invoice item. Items with the same tax rate and tax mode will be combined.

For example, if an invoice with invoice items having different tax rates and tax modes as below:

 

Item Number	Tax Rate	Tax Mode	Amount	Tax	Total Amount	Total Excluding Tax
I-001	10%	Inclusive	$100	$9.10	$100	$90.90
I-002	10%	Inclusive	$200	$18.18	$200	$181.82
I-003	10%	Exclusive	$100	$10	$110	$100
I-004	0%	Inclusive	$100	$0	$100	$100

The tax calculations included in the invoice will be:

• 10% inclusive on $272.72 (I-001, I-002)
• 10% on $100 (I-003)
• 0% inclusive on $100 (I-004)

Tax Transactions

If you need the tax transaction data to complete your tax filings and returns, you can export your Stripe Tax transaction data from Stripe -> Tax -> Registrations:

 

 

Sample of exported tax transactions: