# Taxability of credit card surcharges for Net terms payments

Source: https://developer.avalara.com/sales-tax-integration-guide/dez0946645246596/

# Taxability of credit card surcharges for Net terms payments

Learn how to calculate and record tax on credit card surcharges for invoiced orders that customers pay later under Net terms.

When you issue an invoice with credit terms, such as Net 30, 60, or 90, AvaTax commits and finalizes the original transaction without a surcharge. If the customer later pays the invoice by credit card and you apply a surcharge fee, you can't modify the committed invoice transaction.

To calculate and report the surcharge revenue and any related tax correctly, create a separate transaction for the surcharge at the time of payment.

-   **Separate transaction creation:** When a customer pays an invoiced order by credit card, create a standalone transaction, such as a debit memo or fee invoice, with a single-line item for the surcharge fee.

-   **Tax code configuration:** Map the surcharge line item to an appropriate surcharge tax code, such as `OF060001`. Make sure that the _surcharge only_ transaction uses the same address as the original invoice.

-   **Call timing and execution:** Call `CreateTransaction` to calculate and record the tax on the surcharge transaction before you process or charge the credit card. Make sure that the credit card charge includes the surcharge amount and any calculated tax.

-   **Transaction commitment:** Commit the surcharge transaction in AvaTax so the tax liability is recorded for reporting and returns filing.

Note

For ERP integrations, make sure the payment collection interface lets users trigger surcharge tax calculation before credit card authorization.

To find specific fee and surcharge tax codes, use the [Avalara Tax Code Search tool](https://taxcode.avatax.avalara.com/) or query the `ListTaxCodes` API endpoint, see _Tax code lookup_.