Why a Deal's Tax or Fee Does Not Match Your Template

A deal shows the taxes and fees that were copied into it from a Taxes & Fees template, and those figures stay with the deal from then on. This article covers the four reasons a deal's tax or fee is not the number you expect: the template was edited after the deal captured it, the deal is already sold, a state limit reduced a fee, or Tax Deferred is not doing what it sounds like it does.

This article is only about the amounts on an individual deal. For building and editing the templates themselves, see Taxes & Fees Templates. For a tax or fee that posts to the wrong account, see the accounting articles.

Questions this answers

• "I just raised our doc fee in setup but the deal I'm currently working on still shows the old amount. Do I have to start a brand new deal to get the new fee, or is there a way to pull it into this one?"
• "I already sold a car under the old tax and fee template — now that I've updated the template, will that closed deal's numbers change too?"
• "Every time I type a doc prep fee over a couple hundred dollars on an Ohio deal it gets knocked back down automatically. Why won't it let me charge more?"
• "I checked the Tax Deferred box on a BHPH deal but the tax total on the worksheet didn't change at all. What determines whether that actually does anything?"
• "Why is sales tax not calculating correctly on the last deal I entered?"

Editing a template does not reach a deal that already used it

Taxes and fees are copied into a deal, not looked up live. Raise your doc fee in the template and every deal created from that point picks up the new figure, while deals that already captured the old one keep showing it. Nothing is broken and you do not have to start the deal over.

To pull the updated template into a deal you are still working on, open the deal and use the Taxes & Fees Template field — the Change Profile launcher beside it opens the template list. Re-select the same template and the deal refreshes its taxes and fees from the template as it stands now, then recalculates. Two things to know about that:

• Nothing happens if the template has not been edited since the deal captured it. The refresh only runs when the template is genuinely newer.
• The deal has to be open for editing. A locked deal cannot be changed this way.

Changing the deal's sell date also re-reads the taxes and fees, which is why a date correction can move figures you were not expecting to move. That is the same refresh, not a second behaviour.

A sold deal keeps the figures it was closed with

Updating a template never rewrites a deal that has already been sold and locked. The numbers on that contract are the numbers the customer signed, and they stay put — which is what you want, and also why you cannot correct an old deal by fixing the template.

If a closed deal genuinely has the wrong tax or fee on it, the template is not the lever. That is an unwind, and it has its own consequences for accounting — see the unwinding article before you start.

A state limit can reduce a fee you typed

Some fees are capped by state rule, and the cap is applied when the deal recalculates rather than when you type. On an Ohio deal the documentation preparation fee is limited to the lesser of $398 or 10% of the vehicle sale price. Enter more than that and it is reduced to the allowed maximum, with a message stating the ceiling for that particular deal.

Two consequences that surprise people:

• The ceiling moves with the sale price. On a $2,500 car the maximum is $250, not $398, so the same fee that was accepted on the last deal is cut on this one.
• Leaving the fee blank does not leave it empty — it is filled in at the maximum allowed for the deal.

The limit comes from the state rule, not from your template, so it cannot be raised in setup. A fee marked Read Only in the template is left alone by this.

Fee limits are your responsibility to confirm for your own state and are subject to change; check with your dealer association or advisor rather than treating the figure in the software as legal advice.

Tax Deferred does not change the tax total, by design

Tax Deferred applies to one specific situation: a Texas retail Buy Here Pay Here deal with an amount financed above zero. It is not offered on a single-payment deal, and on any other state or sale type it does nothing at all — which is the usual reason a ticked box appears to have no effect.

Even where it does apply, the tax total on the worksheet is not what changes. The tax stays what your state's rates make it. What changes is how the tax is carried: the deferred portion comes out of the amount financed, and the part attributable to the down payment is treated as collected up front. So "the tax total did not move" is the correct outcome — look at the amount financed instead.

Checklist: sales tax on this deal looks wrong

Work down this list before assuming a calculation error:

1. Which template is the deal on, and when did it capture it? Check the Taxes & Fees Template field on the deal. A deal started before a rate change carries the old rates until the template is re-selected.
2. The effective date of the template. Templates take effect on a date. A deal dated before that date uses the older template.
3. The buyer's address. Depending on your state, tax is figured on your dealership address or on the buyer's. On a California or Colorado deal, the rate is looked up from the buyer's street address, city, county and ZIP, so an incomplete or wrong address gives a wrong rate.
4. The Taxable Items settings. Whether a trade credit, a rebate, a service contract or a particular fee is included in the taxed amount is set per state, not universally. A trade that did not reduce the tax is the most common version of this.
5. State limits. Tax and fee ceilings, and rates that change above a limit, are part of your state's setup and will hold a figure down no matter what you type.
6. Sold and locked? Then the figures are frozen and a template edit will not appear.

DeskManager Online applies the rates and settings your templates hold. Confirming that those match what your state requires is the dealership's responsibility — check with your tax advisor.