Defining General Rate Factor Information

You begin to define a rate factor by selecting Main Menu, Rates, Rate Factor.

Description of Page

Enter a unique Rate Factor code and a Description for the rate factor.

Rate Factor Type is set to Regular, to indicate that this rate factor's values are specified on Rate Factor Value - Main or on Obligation - Contract Values.

Enter a Currency Code to define the currency in which the rate factor's charges are denominated. This field will be gray if the rate factor is referenced on a rate component.

Note:

Rate factors referenced on a rate component must be denominated in the same currency as is the rate.

Select the Value Type to define the kind of value maintained by this rate factor. The Value Type options are:

*Charge*	The value maintained in this rate factor is a fixed amount (e.g., a flat charge).
*Percentage*	The value maintained in this rate factor is a percentage.
*Unit Rate*	The value maintained in the rate factor is a charge per rate quantity.

This field will be gray if the rate factor is already referenced on a rate component or if the rate factor already has values.

Turn on Error If No Value if the system should create a billing error when a rate factor value doesn't exist for the characteristic value linked to the taxpayer. Confused? To clarify this, you need to be aware that there are different types of rate factors:

Those that should have a value for every taxpayer whose rate references the rate factor. A rate factor used to levy the relevant state tax is a good example (assuming every state has a tax). For this type of rate factor, if the system cannot find a rate factor value for the taxing state, it must generate a billing error because data is missing from the system. You would turn on Error if No Value for this type of rate factor.
Those that only have a value when the taxpayer has a characteristic value that levies a charge. A rate factor used to levy the relevant city tax is a good example (because not all cities levy taxes). For this type of rate factor, if the system cannot find a rate factor value for the city in which the taxpayer lives, the rate component will be skipped and no billing error will be generated. You would turn off Error if No Value for this type of rate factor.

Rate factors used to levy taxes may or may not be eligible for tax exemptions; it's up to the respective taxing authority. Taxpayers who are eligible for the tax exemption will have their tax obligation reduced (or nullified) at billing time. For rate factors that are eligible for tax exemptions, turn on Tax Exemption. If an obligation is fully or partially exempt for the taxes defined by a given rate factor, the rate factor and the exemption information for the taxpayer must be indicated on the obligation page. This field will be gray if the rate factor is referenced as being tax exempt in an obligation.

Note:

Tax Exemptions limited to Apply To Rate Components. Although rate factors marked as eligible for tax exemptions may be referenced on several different types of rate components, only Apply To rate components include the logic to check for tax exemption eligibility.

Fastpath:

For more information about how to make a taxpayer tax exempt, refer to Obligation - Tax Exemptions.

Some types of rate factors do not have the same value for all taxpayers. Rather, their value may be unique for every taxpayer or it may be unique for some taxpayers and common for others. For example, rates may be defined for groups of taxpayers based on special incentive programs such as low-income groups or charitable organizations. Those taxpayers that do not qualify for these programs will use a general rate factor. For rate factor types where a taxpayer may have their own unique price, turn on Value In Contract Term. For any obligation that has a unique value for a given rate factor, the rate factor and the obligation's value must be indicated on the obligation page. When applying the rate for a rate factor of this type, the system will first check for the existence of a contract value for the obligation and if one is not found, it will use the value on the rate factor. This field will be gray if a contract term referencing this rate factor exists. Time of Use rate factors may follow this same logic. Taxpayers may override their time of use values by using a contract term.

Note:

The Error if No Value switch also affects what happens if there is no contract term for the rate factor. If the error switch is on, a billing error will be generated. If the error switch is off, no billing error will be generated and the rate component will be skipped.

Fastpath:

For more information about how to specify a rate factor value in a taxpayer's contract, refer to Obligation - Rate Info.

Contract riders are used when the charge associated with the rate factor is only applicable to some taxpayers for some period of time. Turn on Contract Rider Applicability if the rate factor's applicability is contingent on the existence of a contract rider. This field will be gray if a contract rider referencing this rate factor exists on an obligation.

Fastpath:

For more information about how to establish a contract rider for a taxpayer, refer to Obligation - Contract Riders.

The proration information tells the system how to handle changes to rate factor values and their optional contract riders that may occur during a taxpayer's bill period. Turn on Allow Proration if changes to the rate factor's value and/or contract riders should be prorated. If changes should not be prorated, indicate the Rate Selection Date to use when the system retrieves rate factor values or determines if contract riders are applicable; available options are:

*Accounting Date*	The rate factor value effective on the bill segment's accounting date will be used.
*Bill End Date*	The rate factor value effective on the end date will be used.
*Bill Start Date*	The rate factor value effective on the bill segment's start date will be used.

Rate Factor Tree

The right half of this page is dedicated to a tree that shows the rate factors characteristics and their respective values. You can use this tree to both view high-level information about these objects and to transfer to the respective page in which an object is maintained by using the available Go To buttons.

Where Used

Many types of Rate Components may use a Rate Factor to define the amount being charged. Refer to Rate Component - Main Information for more information.

An obligation references Rate Factors as follows:

When an obligation's Apply To rate component references tax exemptible rate factors AND the taxpayer is tax exempt, the obligation will define the rate factors from which the taxpayer is exempt. Refer to Obligation - Tax Exemptions for more information.
When an obligation's rate references rate factors whose charges are taxpayer-specific (i.e., specified on a contract term), the obligation will contain charges for these rate factors. Refer to Obligation - Contract Values for more information.
When an obligation's rate references rate factors that are contingent on contract riders, the obligation will define the rider period (if any) for these rate factors. Refer to Obligation - Contract Riders for more information.