How Do Tax Configurations Work for Items and Plans?

Items will always follow the tax configuration of the Plan they are associated with.

• If an item is set up as Tax Exempt but is part of a plan that does collect tax, both the item and the plan fees would be taxed when the subscription renews.

• Similarly, if an item is set up to collect tax but is part of a plan that is Tax Exempt, both the item and the plan fees would be Tax Exempt when the subscription renews.

If you need different tax configurations for your items and plans, you can handle this in two ways:

1. Create a separate Plan for the items. This allows you to have a different tax setting for the items. For example, an account could have two subscriptions—one under a tax-exempt plan and another with a $0 plan fee and items that collect tax.

2. Bill the items as one-time charges. You can use the Add Charge functionality to bill the items. Just keep in mind that you would need to manually bill these charges every month if they are recurring since you can't set up recurring charges without a subscription.