Discount type scenarios

Use discounts in AFC to adjust transactions for scenarios such as retailer discounts, manufacturer discounts, account-level discounts, subsidized amounts, or goodwill adjustments.


Scenarios	Description
Retail product scenario	A customer has a voicemail and is charged a monthly recurring charge of $6.00/month. The customer buys a second line and gets voicemail free for a month. The billing system will make separate calls to AFC for the monthly recurring charge of $6.00 and the discount of -$6.00. Both transactions will be represented by the same tax category, but the billing system will send an additional value on the discount transaction indicating that it’s a Retailer discount. The $6.00 charge for voicemail generates $0.32 in state sales tax. For the -$6.00 discount, AFC determines that the state allows a full tax credit on Retailer Discounts and generates -$0.32 in state sales tax. The offsetting tax amounts are presumably netted together in the tax summary on the customer’s bill. Whether the charge and discount amounts are netted on the customer’s bill is up to the billing system and doesn’t affect the tax calculation or the presentation of tax on the bill.
Manufacturer product scenario	A customer buys a satellite dish for $300.00 and receives a $50.00 rebate (discount) from the satellite company. The billing system will make separate calls to AFC for the dish charge of $300.00 and the discount of -$50.00. Both transactions will be represented by the same tax category, but the billing system will send an additional value on the discount transaction indicating that it’s a Manufacturer discount. The $300.00 charge for the satellite dish generates $15.90 in state sales tax. For the -$50.00 discount, AFC determines that the state doesn’t allow any tax credit on Manufacturer Discounts and generates $0.00 in state sales tax. The offsetting tax amounts are presumably netted together in the tax summary on the customer’s bill. Whether the charge and discount amounts are netted on the customer’s bill is up to the billing system, and doesn’t affect the tax calculation or the presentation of tax on the bill.
Account level scenario	A customer has an issue on their invoice, and the company provides a credit on their invoice for a previous month to correct the amount. An example is a customer was charged $20.00 for their subscription services and should have only been charged $10.00. Taxes were calculated on the full $20.00 in the prior month. This credit will generate a tax credit for the amount overcharged based on the $10.00 credit.
Subsidized scenario	A Lifeline customer purchases a local exchange service. Local exchange service typically includes a fee for a subscriber line charge of $6.50. Lifeline customers receive an offsetting credit for $6.50. The company still has $6.50 in revenue and may need to collect sales tax on the entire amount. The company is prohibited from drawing on the federal government fund to pay for the tax on any amount due, so the customer must pay all of the applicable tax.
Goodwill scenario	A customer calls to complain about a service outage. The company provides a credit of $10.00 for the amount of time their service was out ,which will apply to their next month's invoice. This type of credit will typically result in a negative tax amount as a response.