#Baris-invoice-connect-tax-rates
final iron
We are running an invoicing platform and our users can create their own invoices with our platform.
I couldn't find much information about connected stripe accounts and invoicing with tax rates in the docs, so basically I was trying to create taxRates for the connected stripe account and attaching them as default_tax_rates to the invoice itself.
But looked like it didn't work.
blazing snow
Gotcha, so it sounds like everything is happening directly on the Connected Accounts. Do you have the ID of an example of an Invoice that you created that you can share, so I can pull it up on my end and take a closer look?
final iron
Yes thats right. So last invoice create calls failed, but here is the recent req that failed because of tax rates. req_Azc4O4iINh9rMP
blazing snow
So it looks like there is an overlap of functionality that you're trying to leverage here. There are two different tax approaches within Stripe.
There are Tax Rates, which are the more manual but more free approach for handling tax calculations:
https://stripe.com/docs/billing/taxes/tax-rates
And then there is Stripe Tax, the less free but much more automatic approach.
https://stripe.com/docs/tax
In that request, you're passing both a Tax Rate, and automatic_tax.enabled = true. The latter part is causing the error because the connected account is not yet configured to use Stripe Tax. If you omit the automatic_tax parameter, is the request to create an Invoice successful?
final iron
Gotcha!! Yes it's successful by removing automatic_tax, may I ask what would be the better practice? How much setup would be needed in order to get automatic Stripe Tax for our connected accounts?
blazing snow
Which is better is going to largely depend on your business scenario. Stripe Tax requires less effort because we keep track of changing tax laws, build rules for them, and then automatically add those based on the customer's address. I don't recall exactly what the fee structure for Stripe Tax is (our Support team can provide clarity on that though) but I believe there is a fee that is charged per transaction that uses Stripe Tax.
Tax Rates are more manual, so they take more effort to set up and maintain. That effort is going to scale based on your business's footprint. The more regions you sell too, the more tax rates you have to stay up to date on and keep current. It will also scale with products as different types of goods are taxed differently.
final iron
I see, thanks for the explanation. Is Stripe Tax only achievable within the dashboard setup? Is there a way to include it into the Stripe Connect onboarding?
blazing snow
I'll need to look into that a bit more. Can you tell me what type of connected accounts you're using? (I'm suspecting Standard accounts, but want to confirm)
final iron
We are using the OAuth service for Connect and should be using the Standard account type.
via https://connect.stripe.com/oauth/authorize
blazing snow
Thank you, so it does look like Stripe Tax is supported for Standard connected accounts, and that those accounts would need to complete some setup within the Stripe dashboard.
https://stripe.com/docs/tax/faq#what-account-types-/-charge-flows-for-connect-do-you-support