CoreBridge uses a precise method for calculating Sales Tax to ensure accuracy and compliance with accounting standards. Each Tax Agency within a Tax Group is calculated and rounded individually before being combined to determine the total tax charged. 


This article explains how individual tax rate calculations work, why rounding is done per Tax Agency rather than by the combined rate, and how this affects your Sales Tax Liability and reporting accuracy.



Table of Contents



Locating Tax Group Information


Navigate to the Management Module / Locations / Manage Locations and select the appropriate Location.


1. Select the Tax Groups tab.




Rounding Details


  • CoreBridge calculates each sales tax rate individually, then rounds off each individual total before adding them together to give the total sales tax that is charged. This is necessary to maintain proper accounting at the Tax Agency level.


  • Computation in CoreBridge and the eCommerce module must be done individually by Tax Agency, not using the group total. 



Example: 

The Kudzo Metropolitan Area is subject to three separate taxes:

  • State Tax: 2.75%

  • City Tax: 2.75%

  • Special Fire Tax: 2.75%

A Tax Group named “Kudzo Metro” is created to combine these three Tax Agencies, resulting in a total combined tax rate of 8.25%.

Combined Rate Calculation

If an Order totals $50.25, applying the combined tax rate of 8.25% results in a tax amount of $4.14563, or $4.15 when rounded to two decimal places.

Individual Agency Calculation

However, since each tax must be reported and paid to its respective Tax Agency, CoreBridge calculates and rounds each agency’s tax individually:

  • State Tax (2.75%) = $1.38188 → $1.38

  • City Tax (2.75%) = $1.38188 → $1.38

  • Special Fire Tax (2.75%) = $1.38188 → $1.38

The sum of these individually rounded taxes equals $4.14, not $4.15.



Why Rounding Matters


CoreBridge - like most accounting software - uses the individual agency rounding method to ensure compatibility with tax integrations and accurate liability reporting. Calculating taxes this way ensures that amounts due to each Tax Agency are correct for both Sales Tax Liability Reports and tax payments.


If rounding differences occur, you can simplify your setup by combining multiple Tax Agencies into a single agency using the total combined rate. This approach helps reduce minor rounding variations and keeps reporting consistent, though it may not be suitable in all cases depending on your sales tax reporting requirements.