If you’re aware of an upcoming tax rate change, follow these steps for First-of-Month and Anniversary billing. As a reminder, it is your obligation to ensure your compliance with all applicable laws and regulations.
First-of-Month Billing
For tenants who moved in before the first day of the upcoming month, where the upcoming month has the new tax rate applied:
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If applicable, disable batch processing before the day your invoices are generated by following these steps in SiteLink Web Edition and unchecking Process Invoices in Step 4.
Note: For larger accounts, you can follow the same steps outlined above in the Corporate Control Center to disable batch processing across multiple facilities at once.
The night before invoices are generated for your new tax rate, temporarily set the new rent tax rate in your software settings or in Corporate Control Center. For example, if your applicable state tax rate is changing for August, and your August invoice captures payments for the second half of July, you should do this on or around July 15th.
Generate all invoices for your new tax rate with the updated rate applied. This ensures all subsequent invoices capture the new tax rate.
After your Invoices are generated for the new tax rate, restore the original tax rate for the remainder of the month with the previous tax rate. This ensures that new move-ins and payments made before the new tax rate takes effect are charged the current tax rate.
Update the rent tax again after the close of business on the last day of the month for the previous tax rate. This ensures that tax payments are applied starting on the first day of the month when the new tax rate takes effect.
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Do not accept pre-payments for the following month to ensure new tenants don’t pay for the next month at an incorrect tax rate.
If you have a tenant who wishes to prepay, first collect the rent for the current month. Next, check the Never Tax Rent box on the tenant’s ledger settings before collecting the pre-payment. You can then uncheck the box again.
Update your Proration Schedule in Program Defaults to not use “Prorate + Charge Next Month’s Rent.” Make sure your proration schedule is set to go through the final day of the month.
Anniversary Billing
Unlike First-of-Month billing, anniversary billing is based on the tenant's first day of the month of move-in. As a result, invoices could be generated on any day of the month.
To ensure accurate tax payments ahead of any known changes, you can do one of two things:
Adjust the tax percentage with the new tax rate before invoices are generated.
Allow invoices to be generated with the previous tax rate applied, and issue credits or add charges afterward to refund or apply any tax payments that need adjustment.
When deciding on your approach, keep in mind that adding a tax charge (and collecting it from your tenant) after the fact may not be possible in your software if the tenant has already moved out or is no longer listed in the system.
Adjusting existing invoices or pre-payments
Wait until the invoice is paid, then issue credits, add charges to refund, or apply any tax payments that need adjustment.
Please note: Tax collected will be represented incorrectly for tenants who are adjusted after paying their bill. You may need to manually adjust this in your accounting software.