How does TaxCloud round sales tax?
1min read
TaxCloud rounds to the 5th decimal based on the number of items within the sales order.
Example 1:
- Line item 1: Hat
- Quantity: 1
- Item Price: $10.00
- Sales tax rate: 0.07253333
- TaxCloud rounded rate: 0.07253
- TaxCloud resulting tax amount due: $0.73 ($10*0.07253)
Example 2:
- Line item 1: Hat
- Quantity: 2
- Item Price: $10.00
- Sales tax rate: 0.07253333
- TaxCloud rounded rate: 0.07253
- TaxCloud resulting tax amount due: $1.46 ($10*0.07253*2)
With item rounding without including the quantity, the example 2 scenario would calculate slightly differently.
- Line item 1: Hat
- Quantity: 2
- Total Price: $20.00
- Sales tax rate: 0.07253333
- TaxCloud rounded rate: 0.07253
- TaxCloud resulting tax amount due: $1.45 ($20*0.07253)
Both methods are generally accepted accounting principles. TaxCloud does not currently calculate with item-based rounding.