Sourcing Tax Comparison

Compare origin- and destination-sourced tax using caller-supplied rates.

Description

Origin and destination sourcing scenarios apply different rates to the same revenue.

Origin and destination sourcing scenarios apply different rates to the same revenue. A signed difference shows which supplied scenario produces more tax.^[1]

Compare origin- and destination-sourced tax using caller-supplied rates.

When to use Sourcing Tax Comparison

Use this tool to compare origin- and destination-sourced tax using caller-supplied rates.

Choose the specific arithmetic or checklist scenario and establish its input amounts, dates, rates and criteria from the applicable records. Keep currencies, periods and jurisdictions consistent; review the tool-specific assumptions before interpreting the result.

How to use Sourcing Tax Comparison and understand its results

Choose the specific arithmetic or checklist scenario and establish its input amounts, dates, rates and criteria from the applicable records. Keep currencies, periods and jurisdictions consistent; review the tool-specific assumptions before interpreting the result.
Enter serviceRevenue, originRatePercent, destinationRatePercent using the field table and calculation rules, then run the tool.
Read originSourcedTax, destinationSourcedTax, taxDifference. The explanation below defines the units, signs, ordering and any flags or placeholder values.
If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.

Input field	Meaning	Value type; see rules below	Requirement
serviceRevenue	Service revenue	number; minimum: 0	Required
originRatePercent	Origin jurisdiction rate (%)	number; minimum: 0	Required
destinationRatePercent	Destination jurisdiction rate (%)	number; minimum: 0	Required

Enter nonnegative revenue and both rates. Read each modeled tax and the destination-minus-origin difference.

originTax=revenue×originRate/100; difference=destinationTax−originTax

Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.

Output field	Meaning	Value type
originSourcedTax	Origin-sourced tax	number; minimum: 0
destinationSourcedTax	Destination-sourced tax	number; minimum: 0
taxDifference	Destination minus origin tax	number

json

{
  "input": {
    "serviceRevenue": 1000,
    "originRatePercent": 5,
    "destinationRatePercent": 8
  },
  "output": {
    "originSourcedTax": 50,
    "destinationSourcedTax": 80,
    "taxDifference": 30
  }
}

Limitations and assumptions

No jurisdictional sourcing rule, nexus, exemption or actual legal tax base is determined.

Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.

Alternative or Complementary methods

Use Remote-Work Tax Overlap: Estimate overlapping remote-work state taxes using caller-supplied rates and creditability. For a complementary task, use Marketplace Tax Split: Split marketplace sales and tax between facilitator and seller collection.

References

Sourcing Tax Comparison — tool.io

Similar or alternative tools

Remote-Work Tax Overlap
Estimate overlapping remote-work state taxes using caller-supplied rates and creditability.
Marketplace Tax Split
Split marketplace sales and tax between facilitator and seller collection.