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Why is tax not calculating correctly in Tennessee?

Overview

Tax is not calculating correctly for an invoice with a single line item in Tennessee

Environment

Tennessee
Avalara Avatax

Resolution

  • Tennessee tiered taxing explanation:State tax rate of 7% is applicable to all amounts.Local tax rate between 2.25%  and 2.75% is applicable between 0-1600 for all items.
  • State single article tax rate of 2.75% is applicable for all single items between 1600-3200.
  • Example: Single item sold for $4000 to NashvilleState tax: 4000 * .07 = 280Local tax: 1600 * .0225 = 36Single Article tax: 1600 * .0275 = 44Total tax: 360
  • Example: Two items sold for $2000 each to NashvilleState tax: 2 * (2000 * .07) = 280Local tax: 2 * (1600 * .0225) = 72Single Article tax: 2 * (400 * .0275) = 22Total tax: 374

Cause

Tennessee Tiered taxing.

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