Tax Calculation

OpenMeter automatically uses external services to calculate and add taxes to invoices.

#Tax Services

Currently, OpenMeter supports the following tax calculation services:

• Stripe Tax
• Anrok (coming soon)
• Avalara (coming soon)

#Automatic Tax Calculation

Tax settings are configured under the Billing Settings.

#Enable Tax Calculation

Enable automatic tax calculation through installed apps. For example, with the Stripe app, the tax is handled by Stripe Tax.

#Calculation Enforcement

When enforcement is enabled, OpenMeter prevents you from starting a subscription if automatic tax calculation isn't supported. When enforcement is enabled, the following actions are blocked:

• Creating a paid subscription when tax cannot be calculated
• Finalizing an invoice when tax cannot be calculated

Validation logic also varies by tax service. For example, with Stripe Tax, OpenMeter uses Stripe's APIs to verify whether tax calculation is supported for the customer. In that case of Stripe, the customer must have a valid tax location.

#Calculation Not Enforced

If enforcement is disabled and tax cannot be calculated, invoices are created without taxes. This option is useful if you prioritize revenue collection over automatic tax calculation. When an invoice is created without taxes, you'll need to handle tax manually.

#Product Catalog Tax Settings

OpenMeter lets you define tax codes and tax behavior per rate card. You can also set default tax behavior and tax codes in the Billing Settings.

Tax behavior can be:

• Inclusive: The listed price already includes tax. A 10% inclusive tax on a $500 item still results in a $500 invoice.
• Exclusive: Tax is added on top of the listed price. A 10% exclusive tax on a $500 item raises the invoice total to $550.

Some payment providers, like Stripe, apply their own default tax code. In those cases, you can leave OpenMeter's tax settings blank.