Your organization may have 1 or multiple types of sales tax that apply to your offerings. You can setup your tax rates in the Payments > Accounting and Finance tab. When creating your offerings like an activity or a membership, you can configure additional rules for how taxes are applied. For example, you can decide if taxes are included or not included in a price. This can cause the applicable sales tax and/or tax rate(s) from each item purchased in a transaction to be different. Therefore, sales taxes are calculated for each individual sales item and the taxes for each item are added up to determine the total sales taxes for a purchase.

You may notice that some taxes are rounded differently than other taxes. This happens because SmartRec uses **Banker’s Rounding** to determine how taxes are rounded. In this common rounding method, taxes are rounded to the nearest even number based on the value of the 0.5. So, if the cent value of the total taxes is **odd**, the 0.5 (half-cent) is **rounded up**. If the cent value of the total taxes is **even**, the 0.5 (half-cent) is **rounded down**.

**Here are some examples to show how this rounding happens:**

An item is sold for $15.00 with a sales tax of 7.5% tax. The taxes for this purchase are $15.00 X 7.5% = $1.125. **Since the two is in the cent’s place and is even**, this value would **round down** to the nearest even cent, $1.12. So, the total price is $15.00 + $1.12 = $16.12.

An item is sold for $15.00 with a sales tax of 8.5% tax. The taxes for this purchase are $15.00 X 8.5% = $1.275. **Since the seven is in the cent’s place and is odd**, this value would **round up** to the nearest even cent, $1.28. So, the total price is $15.00 + $1.28 = $16.28.

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