Introduction
One of the most challenging parts of the financial reporting system is the calculation of tax when an upsell is added to an OTA reservation that includes tax. This happens because we are in a sense combining elements of different natures, which in many cases have different settings due to misconfiguration.
This article provides examples of case scenarios in which you should never add taxes to upsells and what to do if you have done so:
- Unaligned tax settings across channels
- A tax was manually modified and an upsell should have that tax applying
- Expedia + upsells with taxes
- Deleted baseRate when a tax applies to baseRate + optional fees
1. Unaligned tax settings across channels
Case scenario
In this scenario, for example, adding a pet fee via the guest portal to an Airbnb reservation should simply add a city tax, but at the same time, this city tax should apply to the base rate. But we cannot do that.
The fix: Set the same taxes across all channels
- In terms of reporting, there is not much logic in using different tax types depending on the channel, for authorities it should always be the same
- If you already had the city tax in the price breakdown, you could add the part corresponding to the upsell
- Adjust the tax mapping for Airbnb or Booking.com to match the ones you should use for direct channels and upsells
2. A tax was manually modified and an upsell should have that tax applying
Case scenario
The fix: Avoid manually modifying taxes
- Once taxes are modified in the Hostaway Dashboard, overwriting them based on new data may be unexpected
- When data has been manually modified Hostaway follows the rule of respecting these modifications, but from that moment onwards, you will need to manage them manually
3. Expedia + upsells with taxes
Case scenario
- Expedia reservations in Hostaway don't include taxes in the price breakdown because of the way Expedia reports them
- Hostaway calculates taxes and it would be very risky to include them in the price breakdown
- Therefore, if there is an upsell with a tax included, Hostaway won't add the tax because it is an all-or-nothing option and it could potentially mean that you are adding a tax that is already included in the total price
- The consequence is that the total price may lack taxes
The fix: Manually adjust the total price or add a piece to the price breakdown
- If some amount still needs to be manually charged, create a manual charge for that concept
4. Deleted baseRate when a tax applies to baseRate + optional fees
Case scenario
- Variation of case scenario number 2 due to deleting the baseRate of the reservation
- If baseRate is not in the reservation, but a tax should apply to baseRate and other fees, the system doesn't apply the tax
- It's very uncommon that a reservation doesn't have a baseRate and a bad approach
The fix: You should always keep the baseRate there
- Having it as 0 could be an option