How to handle Rule Scope (Retail vs. Wholesale Transactions)

Some excise tax rules are configured to apply only to retail transactions. If the merchant primarily operates as wholesale, those retail-only rules will not trigger.

Root Cause Analysis

Some excise tax rules are explicitly scoped to apply only to retail transactions.

• If a merchant operates as wholesale, those retail-only rules will not apply, resulting in $0.00 tax even when a retail rule exists.
• In some jurisdictions, wholesale coverage may exist only at the county level, while state-level rules apply exclusively to retail.
• Example: A Maryland rule was configured for retail transactions only. Since the merchant’s transactions were wholesale, the rule did not trigger. The only wholesale coverage available was for Montgomery County, which did not apply to their orders.

Resolution Guidance

1. Confirm Transaction Type
   • Check whether the order is classified as retail or wholesale.
2. Verify Rule Coverage
   • State current setup applies only to retail transactions.
   • Wholesale rules exist only at the county level (e.g., Montgomery County).
3. Client Confirmation
   • Confirm with the merchant whether they expect the State rule to also apply to wholesale transactions.
4. Escalate if Needed
   • If the client requests State excise tax to be collected for wholesale, raise a request for a rule configuration update.
5. Communicate Clearly
   • Explain that the system is functioning as configured, and taxes did not apply because the retail-only rule scope excludes their wholesale orders.