> ## Documentation Index
> Fetch the complete documentation index at: https://docs.spacebaseapp.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Tax codes

> Define reusable tax codes and understand how their effective rates apply to expenses.

A tax code combines a tax identifier, location, and rate history so you can reuse it on lease expenses. When Spacebase generates tax expenses from a schedule, it selects the rate effective on each expense's due date.

## Create a code

1. Open **Company > Company Settings > Tax Codes** and click **Create Tax Code**.
2. Enter the code your team uses to identify the tax, select its tax type, and complete the location information.
3. Set **Is recoverable** to record whether your organization treats this tax as recoverable.
4. Enter a **Description** if you want specific wording on the generated tax expense line. Without one, Spacebase uses the code followed by “Tax.” Use **Notes** for additional reference information.
5. Click **Create Tax Code**.

Select an existing code's row to update its details. Creating and updating codes requires permission to manage company settings.

## Add a rate and its effective date

In the **Tax Rates** section of the same page, click **Create Tax Rate**. Select the tax code, enter the rate as a percentage (for example, enter **8.25** for 8.25%), and set its **Start date**. Save the rate.

When a rate changes, add a rate with the new start date so the code retains its earlier rate history. Each code can have only one rate for a given start date.

## How rate dates affect tax expenses

Tax rates have a percentage and a start date. Spacebase uses the most recent rate whose start date is on or before the expense's due date.

For example, with a rate of **5%** from January 1 and **6%** from July 1, a generated tax expense on a 1,000 charge due June 30 is 50. For a charge of the same amount due July 1, it is 60. These are illustrative values, not jurisdiction-specific tax rates.

A code's description and location do not establish its rate. Check that the code has the required rate history before using it to generate tax expenses. The list's latest-rate column alone does not describe every historical period.

Use **Export Tax Codes** to download the list. For applying tax codes to lease expenses, see [Lease Abstraction](/leases/abstraction).