Thanks to everyone who responded to my first post. This is very helpful information as we consider our membership feature in v16. I have a few follow up questions, not all of which are specific to Canada, necessarily, but since we're on the topic of taxes anyway, I thought I'd ask you.
If we had a brand new place in the system to set up taxes, would they need to be associated to a fiscal year or would you prefer (and be able to) not to have to recreate rows in a tax table each year? Would you collect tax money for different fiscal years in different GLs? Would you subdivide further for any reason (e.g. quarterly) and/or do you see any need for a date range not directly tied to a fiscal year?
If taxes needed to be separated by fiscal year, would we care about the date the membership was purchased for (i.e. date of the order or contribution) or the date the membership started (say, in the case a membership was renewed a few months early)? What about if a tax rate or the rule about what it applies to change? I have been assuming in both these cases, we would care about the order/contribution date, but wanted to double check.
We already have an amount on a membership level called Goods and Services Value. In the case that only part of the membership is taxable, would it always be the amount that the membership was sold for minus the Goods and Services Value, or would we need a new field to track the taxable portion of the membership? If you discount a membership that has a taxable portion and a non-taxable portion, does the discount come solely out of one or the other of the portions or is it equally distributed?
Thanks again,
Mark Rhodes
Business Analyst
Tessitura Network
If we had a brand new place in the system to set up taxes, would they need to be associated to a fiscal year or would you prefer (and be able to) not to have to recreate rows in a tax table each year? We wouldn't necessarily need them to be associated with fiscal year, but would need some way to start and end them as sometimes the tax amounts do change.Would you collect tax money for different fiscal years in different GLs? Nope. Every fiscal year is the same GL for us.Would you subdivide further for any reason (e.g. quarterly) and/or do you see any need for a date range not directly tied to a fiscal year? Don't think we need to divide in any way for taxes...but again, they do change on random schedules sometimes (with change of government)...so need a way to date limit them.What about if a tax rate or the rule about what it applies to change? I have been assuming in both these cases, we would care about the order/contribution date, but wanted to double check. Order date works for us. We don't need to tie the actual membership date to the taxes in any way. The order date should suffice.
We already have an amount on a membership level called Goods and Services Value. In the case that only part of the membership is taxable, would it always be the amount that the membership was sold for minus the Goods and Services Value, or would we need a new field to track the taxable portion of the membership?Yes for us. Our memberships are always sold as, for example: advertised at $100 and then we pull out the tax ourselves to get the product price. Don't necessarily need a separate field, as long as the tax applies right to the membership price. If you discount a membership that has a taxable portion and a non-taxable portion, does the discount come solely out of one or the other of the portions or is it equally distributed?For us, the discount comes off 100% from the product portion and then the tax gets recalculated. So for example, $100 membership with a 25% discount. The product price is $95.24 and the tax is $4.76. When we discount, it is $95.24 - 25% and then we reapply the 5% tax to get the new total.
One last thought..It would be a big of a pain to have to setup taxes in two different spots. So one spot for memberships and a separate spot (as a fee in our case) for tickets. Ideally, it would be great that taxes all live in the same spot so we don't have multiple setups to do for these as they change and get adjusted.Hope this helps! :)
Thanks, this was very helpful.
On your final thought, I hear you. The long term plan would be to try to consolidate tax setup to one place, but changing the way we do taxes on tickets is not in scope for v16. The way I'm thinking about it right now is that if we try a new thing for memberships and get feedback on it, we could look at expanding that for future versions.
And a follow up on one of your responses. What if you have a $150 dollar membership, of which $100 is taxable and the other $50 isn't and then you decided to discount that membership 25%. Would you expect the taxes work out the same way that the discounted $100 membership where all of it is taxable works or differently.
I figured that would be your response, but I was hopeful it wouldn't be haha!And in that case, (we do have that case!) We would do the math to figure out the total discount from the $150. Then, we would apply that discounted amount to the taxable $100 and then apply tax. Then we would add back in the non-taxable $50. When we do this, in our case, we actually phrase the discount as say "25% off your $100 membership that still requires a $50 (not taxed) donation." But, if we were to discount the whole thing, we would still leave the donation at $50 and only discount the product itself at a higher rate to compensate. Hope that makes sense ;)