> For the complete documentation index, see [llms.txt](https://docs.navigaglobal.com/circulation-setup-manual/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.navigaglobal.com/circulation-setup-manual/accounting/taxes-menu/tax-authority.md).

# Tax Authority

In Circulation, taxes are set up under a tax authority, which represents a geographical area. The tax authority can then be linked to one or more cities, counties, states, countries, and publications. Taxes are automatically applied to accounts and subscribers who are qualified. The diagram below shows the four levels at which an account or subscriber must be eligible in order to be taxed.

<figure><img src="https://2165740141-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F5MIKWQvI2WSa0XQfA9VW%2Fuploads%2FyRjuZ7kuirgdJCu5rhMR%2FTax%20Authority%20-%20four%20levels.png?alt=media&amp;token=95364579-5b37-449d-88be-b8f40ee76e62" alt=""><figcaption></figcaption></figure>

#### To set up a tax authority:

1. Select Tax Authority from the Taxes menu to display the Tax Authority screen.<br>

   <figure><img src="https://2165740141-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F5MIKWQvI2WSa0XQfA9VW%2Fuploads%2FMDfqoL1GxkIUi8FJ9WdK%2Fimage.png?alt=media&amp;token=4eeea94d-a8d5-4e8a-a97f-f4e68b9269b7" alt=""><figcaption></figcaption></figure>
2. Click the Add icon and complete the following fields.

   <table><thead><tr><th width="218.33333333333334">Field</th><th width="120">Type</th><th>What to enter</th></tr></thead><tbody><tr><td>TAX AUTHORITY</td><td>open (9)</td><td>Enter an ID for the tax authority. For example, enter “MN” for Minnesota sales tax.</td></tr><tr><td>START DATE,<br>END DATE</td><td>date</td><td>Enter the date range during which this tax authority is valid.</td></tr><tr><td>DESCRIPTION</td><td>open (30)</td><td>Enter a description of this tax authority.</td></tr><tr><td>TAX TYPE</td><td>predefined</td><td>Indicate the type of tax (country, state, county, or city).</td></tr><tr><td>SALES TAX PERCENT</td><td>decimal (5)</td><td>Enter the sales tax percent.</td></tr><tr><td>TAX ID</td><td>open (15)</td><td>Enter your tax identification number.</td></tr><tr><td>ROUNDING METHOD</td><td>predefined</td><td>Indicate the rounding method for tax calculations: Always Up (round the tax up to the next cent), Always Down (round down to the next cent), or Standard (round up if the amount is .005 or above; otherwise round down).</td></tr></tbody></table>
3. Click OK to save the tax authority in the database or Add Another to save the existing record and add another tax authority.