Tax Rate Changes

Tax Sign in Window

With Nova Scotia set to reduce its HST tax rate from 15% to 14% on April 1, 2025, it is timely to review the seamless way for users to manage tax rate changes over time in AARMS. This feature ensures accurate taxation by allowing users to specify date ranges for different tax rates, ensuring compliance with evolving tax regulations.

Configuring Tax Rate Changes in AARMS

Taxes are managed in Preferences/ Account Configuration / Tax Setup menu. The AARMS tax setup enables users to define date ranges for specific tax rates. For example, an HST rate could be configured at 15% until March 31, 2025, and then automatically adjust to 14% from April 1 onward. This capability allows businesses to plan ahead and avoid manual adjustments when tax policies change.

To set a new tax rate for a future date simply click on the “New Tax Rate” button and provide the new rate and From Date. While the Tax From date is mandatory there is no need to provide a To Date (tax end date) until the date is known when the tax rate will change.

Tax Setup Form

Determining the Applicable Tax Rate in AARMS

The date used to determine the applicable tax rate in AARMS is configured by AASI staff at the time of implementation. Users can choose between two options:

1. Transaction Date (default configuration)

2. Invoice Date (optional upon request)

   
   

The most common configuration uses the individual transaction date to determine the correct tax rate.

How AARMS Assigns Transaction Dates

The transaction date is not always visible to the user in AARMS, the following outlines how it is assigned in the four different types of transactions.

1. AvCharge Movement-Based Transactions

   
   

For AvCharge movement-based transactions, AARMS assigns a transaction date that corresponds to the local date of the associated movement. The system uses your company's local time zone, regardless of whether invoicing is configured in UTC or local time.

2. AvCharge Customer-Based Transactions

When a user creates a User-Tagged Customer-Based transaction, the transaction date can be edited within the form. By default, it is set to the last day of the current billing period but can be adjusted to any date within the same period.

3. ReCharge Contract-Based Transactions

Transactions auto-generated from ReCharge Items, including "User" type ReCharge Items, are assigned the first day of the beneficial use period. For example:

• Invoicing fixed leases for March 2025 during the February billing period, the transaction date will be March 1, 2025.

• Invoicing utilities in arrears for January 2025, the transaction date will be January 1, 2025.

4. Miscellaneous Transactions & ReCharge Invoice Adjustments

When creating a Miscellaneous transaction in either the AvCharge or ReCharge modules, or when adjusting an invoice associated with a ReCharge item, users can modify the pre-populated transaction date to reflect the appropriate tax rate in the form.

Miscellaneous Fee Form

Ensuring Compliance and Accuracy

AARMS provides users with the necessary tools to manage tax rate transitions effortlessly. By correctly configuring tax rate date ranges and understanding how transaction dates are assigned, businesses can ensure compliance and maintain accurate financial records.

For further assistance with configuring tax rates in AARMS, please reach out to AASI support.