> For the complete documentation index, see [llms.txt](https://docs.navigaglobal.com/circulation-user-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-user-manual/accounting/account-billing-menu/trans-exclusion.md).
# Trans Exclusion
Certain states that tax newspaper subscriptions allow tax on the delivery cost to be excluded. In Circulation, the delivery cost is equivalent to the credit paid to the account for delivery. For example, if a subscription costs 20.00, the tax is 2%, and the account is credited 5.00 to deliver the subscription, we would wind up with:
This option, Trans Exclusion, calculates the delivery cost exclusion. A report is created as part of the process. Another option, Tax Exclusion, can be run to deduct taxes for subscriptions in which the delivery cost exceeds the cost to the subscriber from the transportation exclusion (see [Tax Exclusion](/circulation-user-manual/reporting/taxing-menu/tax-exclusion.md) for more information).
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**Note:**
* The Transportation Exclusion Report is part of the Taxing add-on option. Contact the Naviga Support Center if you wish to purchase the Taxing add-on.
* The tax exclusion amount will be incorrect if accounts are charged and credited for office pay subscriptions. To produce accurate exclusion figures, you must set up account rates so that accounts are only credited (not charged) for office pay. Also note that in order to find the subscriber tax authority, an account tax authority needs to be set up and attached to the accounts; the tax for the tax authority should be a charge of zero (unless accounts are actually taxed).
* A subsidy amount can be added to the transportation cost, based on the Business Rule— “***What is the daily subsidy amount which should be added to the remit on payment trans cost calculation?***” (Transportation Cost section) or, if defined at the route level, the Route Subsidy field in the Route Setup Utility.
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A Business Rule— ***Should transportation costs be excluded?*** (Account Finance section), determines whether Transportation Exclusion will be run. If so, invoices, deposit slips, or the Billing Journal must be run before Transportation Exclusion can be run. Once Transportation Exclusion has been processed, invoices, billing journals, and deposit slips can no longer be generated for the billing run.
To calculate the delivery cost exclusion, the report will total the route’s draw credits, and multiply that total by the subscription tax percentages for the tax authority. The tax percentages will be based on the subscription tax authorities. To find the tax authorities, the report will use the carrier’s publication address or the carrier’s address (depending on how the Business Rule— ***Which address should be used for determining an account’s taxability?***, is set). If it is set to “publication”, the publication address will be used; if it is set to “account” or “route”, the carrier address will be used.
#### To create the Transportation Exclusion Report:
1. Select Trans Exclusion from the Account Billing menu to display the Account Transportation Exclusion window.\
2. Select the account billing run for which to calculate the transportation cost.
3. Click Continue to run the report. The report will also create GL transactions (see [GL Entries for Subscriber Taxing](/circulation-user-manual/reporting/taxing-menu/tax-liability.md#gl-entries-for-subscriber-taxing) for details).
#### Example—Transportation Exclusion Report
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