Things to consider before joining the beta

Hands typing on laptop running Making Tax Digital software in office setting

Parts of your sales tax workflow may be affected, as the product is in an early stage beta. Please review and consider the following.

Invoicing

  • Our new auto sales tax product only works with Xero New Invoicing. If you choose to take part in this sales tax beta, your Xero organization will be permanently switched to New Invoicing.
  • When creating an invoice using auto sales tax rates, you may no longer interact with the tax rate field, and won’t be able to select manual tax rates on invoice lines.
  • Currency selection on auto sales tax invoices is locked to USD.
  • Auto sales tax rates are calculated in 50 US states and Washington D.C., and exclude US Territories.
  • When creating a repeating invoice, auto sales tax rates are disabled and manual sales tax rates must be used.
  • When using the “copy-to” feature for your invoice, auto sales tax rates and amounts will be cleared.
  • When importing or exporting an invoice, auto sales tax rates are not included

Auto sales tax invoices

  • Auto sales tax invoices cannot be updated in bulk using the "Find and recode" feature in Xero
  • Connected apps cannot create or edit auto sales tax invoices.Currency selection on auto sales tax invoices is locked to USD.
  • Once an invoice with auto tax rates has any payments, edits can no longer be made to that invoice. Payments must be removed in order to edit the invoice.
  • Sales tax codes saved to an item in Products and Services will be applied to that item on your invoice. However, sales tax codes chosen on an invoice will not save back to that item in Products and Services.
  • Exemptions cannot be applied to invoices, nor will they be included in the new sales tax report.
  • Auto sales tax rates are available on New invoicing only. This means auto sales tax rates will not be available for quotes or credit notes.
  • When creating an invoice in New Invoicing using manual sales tax rates, a breakdown of the sales tax calculation components will not appear on the invoice edit or view page.

Reporting

  • Our beta sales tax report will only include invoices that have an auto tax rate applied. If you need to report sales tax on past transactions that have a manual tax rate applied, you can use the existing sales tax report. You’ll need to use the existing report for manual journals, credit notes, or receive money transactions. This means you may need to run both the beta and existing sales tax reports.