Why is tax not calculating correctly in Tennessee?
Overview
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Tax is not calculating correctly for an invoice with a single line item in Tennessee
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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 to $1600 for all items.
- The state single article tax rate of 2.75% is applicable for all single items between $1600 to $3200.
- Example: A 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.