Tax Rounding Using Discreet and Bundled Taxes
Posted by Jeff Tweddale on 10 Oct 2018 11:18 AM
Properties can place many tax values on their RENT Item (rate applied as a Charge nightly). BookingCenter rounds most currencies to the third decimal point, to leave a 2-decimal value. We follow the generally-accepted norms in how rounding occurs: .005 upward, round to .01; .004 less, to .00
There are times in which a property will 'add up all taxes' (ie, bundling) and get a rounding that is different than if they apply the taxes discreetly. If a property wishes to have simple taxes (such as one tax applied for 17%) then rounding may occur differently than if they apply the taxes discreetly.
Take an example of a Rate of $95 that has 4 taxes that would total 17% if added together. When they are discreetly posted from the base rate of $95, the taxes would like like:
Occupancy: 6, on $95= 5.70
Local Tax: 8.5, on $95= 8.075 (which rounds to 8.08)
County Venue Tax: .5, on $95= .475 (which rounds to .48)
CITY VENUE TAX: 2, on $95= 1.90
Add these taxes up and one gets: $16.16
But if they were summed into a single tax (17%) posted from the base rate of $95, that tax value would be: $16.15
Luckily, tax authorities respect generally-accepted norms of rounding, and as long as a property is consistent in how their taxes are being applied, will suport a merchant's use of either discreetly showing taxes, or bundling them into a single value.