Bill Factor Value Proration
Bill factor value proration behaves the same way any time a bill factor value changes within a calculation period. This could be due to a change in a tax rate, a contract rider becoming effective, a tax exemption expiring, etc.
Multiple bill calculation lines are generated for a given calculation rule when a proratable bill factor value changes during the calculation period.
Example:
If the state tax rate changes from 6% to 6.5% on April 16, and the calculation period is April 1 to April 30.
• The first BF value factor period April 1 to April 15, so BF value period factor is 0.5.
• The value used in the first bill calculation line for state tax is 6% x 0.5 = 3%.
• The second bill factor value period is April 16 to April 30, so the BF value period factor is 0.5.
• The value used in the second bill calculation line for state tax is 6.5% x 0.5 = 3.25%.