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For example, a company may sell a customizable product called Concrete Services. As its components, this product may have the cost of concrete, the cost of using a truck to pour concrete, the cost of labor, and the cost of engineering services. In some jurisdictions, these components may be taxed at different rates.
You can control how tax is computed by setting the Tax Subcomponent flag. To tax the components individually, set the Tax Subcomponent flag on the root of the customizable product or bundle. If you do not set the Tax Subcomponent flag, the tax is computed on the total price of the customizable product or bundle.
If one of the components is itself a customizable product, you can set the Tax Subcomponent flag on the component. This causes the tax for that component to be the sum of the tax computations on the components of that component.
The tax will be calculated accurately if you apply volume discounts or bundling discounts to the product. These discounts are applied at the component level, so the tax on each subcomponent will be adjusted to reflect the discount.
CAUTION: The tax will not be calculated accurately if you use a single-factor pricing model, which applies the discount to the total value of a customizable product, not to each component. You also cannot use simple bundles for pricing when tax rates of components are different.
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