Revised 06.04.24

 

Overview

Typically customers pay tax when purchasing parking from us. In years past, the amount of tax a parker paid was set by the Market President/Account Manager at each individual rate. No longer will you be responsible for setting the taxes (or lack of taxes) – this work has shifted to the Finance department. In short, the Finance department will work with a 3rd party to determine the appropriate tax rates for a location (even if it’s 0% tax) and will be responsible for programming/updating the tax rates.

If you’re no longer programming the tax amount in each rate, how will the system know what amount of tax to charge? Tax settings now live in a new area of the Operator Dashboard called Taxes (Operator Dashboard > Manage > Taxes). The system will consult the tax record to determine the appropriate tax to charge the parker (even if it’s 0% tax)

Each location will have a tax record (even if it’s 0% tax). This approach has several key benefits:

  • Location’s tax rates, including changes, will be certified accurate by a 3rd party
  • Tax rates set at a location instead of by rate, making it easier to update tax rates
  • Ability to schedule future tax rate changes to go in effect at a particular date/time
  • No longer needing to set/calculate a pre-tax price and post tax price when creating rates


Tax Records

You can view your location’s tax rates using the Operator Dashboard:

  1. Login to the Operator Dashboard: www.premiumparking.com/manage
  2. Select Manage
  3. Select Taxes
  4. View your location’s tax rates. You can use the filters to identify certain locations/markets

Each row represents a tax record at the specified location.

For each tax record, there are several types of tax that can be applicable:

  • State tax
  • County tax
  • City tax
  • Local/Parking/Other tax

You will see a total column which is a sum of the 4 tax components mentioned in the above list.

You will also notice a column that lists the products that the tax rates are applicable for. This distinction will set us up to be able to charge different tax rates depending on the product purchased. In most situations, you’ll have a single tax record for each location, but in theory, you could have multiple tax records for a single location if each tax record has no overlapping products.

The exact tax percentage rates at your location are determined by the Finance department. Finance works with a 3rd party company to determine the appropriate tax rate to charge at each location. When the 3rd party company identifies a location’s tax rate is changing, they will communicate this to Finance, who will schedule the tax rate update to occur at the appropriate date/time.

Rates

Now that you are no longer programming the dollar amount to charge for tax at an individual rate, how does this updated approach impact how I program rates?

You’ll have to decide how the system should handle the tax at your location. To do this, you’ll now set EITHER the pre-tax price or the post-tax price (“price”).

Rates – Pre-tax Price

If you set the pre-tax price, the system will add that location’s tax on top of the pre-tax price to determine the parker’s cost. For example, if your pre-tax price is $9.09 and your location’s tax rate is 10%, the parker’s cost will be $10.00.

Let’s say the tax rate at this same locations updates to be 15%, the parker’s cost will update appropriately. For example, if the pre-tax price is still $9.09 and your location’s updated tax rate is 15%, the parker’s cost will be $10.45.

This is a key point to understand – by setting the pre-tax price, you are telling the system to update the post-tax price (“price”) when the tax rate changes.

Rates – Post-Tax Price

If you set the post-tax price, the system automatically calculates the pre-tax price based on the tax record for the location. For example, if your post-tax price is $10.00 and your location’s tax rate is 10%, the pre-tax rate will be calculated to be $9.09.

Let’s say the tax rate at this same locations updates to be 15%, the parker’s cost will NOT update since you’ve set the rate to be $10.00 post tax. However, the pre-tax price will update. In this example, the pre-tax price will shift from $9.09 to be $8.69. Again, the customer will still pay $10.00 since that is the post-tax price (not factoring in other price adjustments like service fees, rate bots etc)

This is a key point to understand – by setting the post-tax price, you are telling the system to NOT update the post-tax price (“price”) even when the tax rate changes.

Service Fees

Taxes are calculated prior to factoring in service fees. For example:

  • Pre-tax rate = $9.09
  • Tax rate = 10%
  • Service Fee = $2.00

In the above setup, the tax amount would be $0.81 (10% of $9.09). Notice the calculation did NOT include the $2.00 service fee. The final cost to the parker would be $12.00.

Displaying Tax to Parkers – During Checkout

When a parker purchases, we show them the total parking cost. We have the option to show what portion of transaction is driven by tax or not. Regardless of if we show the tax breakout, the tax rate set in the tax record (on Operator Dashboard > Manage > Taxes) is charged.

For a location, we can opt to display tax to the parker or not.

To set if the parker should see the tax broken out or not, you will use the setting on the location record in the Operator Dashboard.

  1. Login to the Operator Dashboard: www.premiumparking.com/manage
  2. Select Manage
  3. Select Locations
  4. Select the location ID you want to update the tax display settings
  5. Use the “show tax to parkers” checkbox to indicate what you want the parker experience to be
    1. If “show tax to parkers” is checked, the amount of the total price that tax accounts for will be displayed on a separate line item. (See below for an example)
    2. If “show tax to parkers” is unchecked, the amount of the total price that tax accounts for will NOT be displayed on a separate line item. Instead, the “rate” line item will include the tax amount. (See below for an example)
  6. Select Update Location

Display Setting – Display tax to parker is checked/enabled

Notice below that the amount paid by tax ($0.91) is shown on a separate line item

A screenshot of a receipt Description automatically generated

Display Setting – Display tax to parker is unchecked/disabled

Notice below that the amount paid by tax ($0.91) is no longer shown on a separate line item. Instead, the $0.91 is absorbed into the “Rate” line item – updating the rate line item to shift from $9.09 to $10.00

 

A screenshot of a receipt Description automatically generated

No Tax Locations

There are locations in which you cannot charge tax or the tax rate is zero. Regardless of this fact, there must be a tax record created for the location (on Operator Dashboard > Manage > Taxes). If your location cannot charge tax or the tax rate is zero, you should see the tax record showing 0% for the state/county/city/other tax amounts. If you feel your location should not charge tax and there is a non-zero tax rate on Operator Dashboard > Manage > Taxes, contact the Finance department to discuss.

New Locations

When you create a new location in the Operator Dashboard, the system will automatically create a tax record on Operator Dashboard > Manage > Taxes. The tax record will automatically set at 0% tax.

Although the Finance department will be notified of new locations, it is in your best interest to ensure the Finance department is aware (and with as much advance notice as possible) about the new location. Once the Finance department receives the tax rate from the 3rd party tax company, they will set the location’s tax rate on your behalf.

Note: The Finance department does not instantly receive tax rates from the 3rd party tax company. For this reason, it is in your best interest to notify the Finance department as early as possible to give them as much runway to receive the location’s tax rate.

Tax Updates

Finance works with a 3rd party company to determine the correct tax to charge at each location. If the 3rd party company determines that the tax rates have changed at existing locations, they will inform accounting using a spreadsheet that shows the updated tax rate and when the updated tax rates go into effect.

Accounting will then upload this spreadsheet to the Operator Dashboard, and they will set the effective date (a future date in which the system will begin using the tax rates). Typically, accounting will set the effective date at the start of the next month and by doing so, the updated tax rates will go into effect at the effective date.

Once a location’s tax rate updates, the historic records like Location Revenue will continue to have the correct tax rates based on when the transaction took place. For example, if the amount paid for tax is $1.36 and the tax rates update, we will continue to show the historic location revenue records with the tax amount that was appropriate at the time of the transaction. The new tax rates will only impact purchases bought directly following the tax update.

Location Revenues

Location Revenues (https://manage.premiumparking.com/reports/location_revenues) displays several tax columns to show how much of the paid amount is driven by the various tax types. You’ll see 5 columns related to tax:

  • State tax
  • County tax
  • City tax
  • Local/Parking/Other tax
  • Total – shows the total amount of tax paid for the transaction. This is a calculated field (sum of the other 4 individual tax amounts)

The amounts represented in each column will indicate the amount paid for each of the tax breakouts.

Rate Bots

The rate bot price adjustments are factored in PRIOR to adding any tax amount. For example, if your pre-tax price is $10, and you have a rate bot that increases the price by $1, the tax will be calculated on the $11 total. If the tax rate is 10%, the tax will be calculated to be $1.10.

Also note that before accounting team took over setting tax rates, some locations were using rate bots to set the location’s tax. No longer can location’s use the rate bots for tax purposes because if they do, we will essentially be double charging for tax (tax charged by what is set on Manage > Taxes and tax charged by rate bots)

I want to discuss/change the tax rate(s) at my location(s)

Contact Ryan Crespino ([email protected]) (cc Brian Showalter [email protected]) to discuss any tax related items, including discussions around why a particular tax rate is being used at a location.

NOTE: Product Department has no ability or authority to change tax rates.

On Demand/Reservations, Subscriptions, Validations

Each location can have different tax rates for different products. For example, if the situation called for it, you could have 0% tax for Subscriptions at P1234 but 10% tax for On Demand/Reservations. If that is the needed setup, you would see two rows on Operator Dashboard > Manage > Taxes for P1234 with one row specifying the tax for Subscriptions and one row specifying the tax for On Demand/Reservations

Historic Tax Rates and Changes

We are tracking and recording historic tax rates. You do not have a visual to see all the historical tax records, but Business Intelligence has the tax record logs – implying that they can always report what the tax record was at a particular date/time, including reports on when the tax records changed, by whom, etc.

How to Edit Tax Rates - Manually

Only the accounting team can edit tax rates, specifically the ability to update a location’s state tax %, county tax %, city tax %, and/or local/other tax %. To edit tax rates:

  1. Login to the Operator Dashboard: www.premiumparking.com/manage
  2. Select Manage
  3. Select Taxes
  4. Use the filters to find the location you want to edit the tax rate
  5. Select Edit for the tax record you wish to edit
  6. Update the form as needed
  7. Select Save. It’s best practice to recheck the tax record for the recently edited location to ensure the tax is as you expect it to be.

 

FAQ

What happens if I only have my tax record charging tax if purchasing subscriptions (or any other product type)

Let’s say you have a location where you only have tax charges for validations (this is a hypothetical situation). If a parker purchases an On Demand, Reservation, or Subscription, they will not be charged tax since there is no tax record to indicate that the system should charge the parker tax for that product.



In the above example, if a parker purchases On Demand, Reservation, or Subscription, no tax is charged because the system has no tax record for those products at that location.

 

How does showing tax or not showing tax impact emailed receipts?

Emailed receipts for On Demand, Reservations, and Subscriptions show a total cost line item, with no breakdown of the tax amount. This is true regardless of if your location is set to display tax to the parker.