The Safe Harbor Override allows you to adjust Federal traffic study percentages for:
Provide the following information for a Safe Harbor override:
Safe Harbor Type (sh)
Original Federal TAM (old)
New Federal TAM (new)
The Original and New Federal TAM values are decimals. For example, a 64.9% Federal TAM value is entered as “0.649”. The State TAM is calculated automatically (State TAM = 1.0 - Federal TAM).
We recommend using a client profile with a custom configuration applied even though the CalcTaxes request gives you the flexibility to input Safe Harbor Override information for each transaction. This results in better performance from the AFC Tax Engine because your override settings are cached before tax calculation begins.
Why use a Safe Harbor Override?
Default federal safe harbor percentages are used by the AFC Tax Engine:
Override the federal safe harbor percentage based on the result of a traffic study. The state safe harbor percentage is calculated automatically based on the overridden federal percentage.
Safe Harbor Override Example
The VoIP safe harbor type (sh) is being overridden from the original Federal TAM (old) of 0.649 (64.9%) to your calculated Federal TAM (new) of 0.250 (25%).
The result of the Safe Harbor override can be seen on Federal-level Tax Type IDs (tid) 162, 226:
Total Charge (tchg) is 25 based on the requested 100 charge (Total Charge is 64.90 without the Safe Harbor override)
Exempt Sale Amount (exm) is 75 based on the requested 100 charge (Exempt Sale Amount is 35.10 without the Safe Harbor override)
State taxes are automatically updated based on the Federal override. The State TAM is 75% (1.0 - new Federal TAM) and can be seen on Tax Type IDs (tid) 161, 217, 450, 452, 453, 454:
Total Charge (tchg) is 75 based on the requested 100 charge (Total Charge is 35.10 without the Safe Harbor override)
Exempt Sale Amount (exm) is 25 based on the requested 100 charge (Exempt Sale Amount is 64.9 without the Safe Harbor override)