Configure Tax Settings

Law firms meet jurisdictional tax requirements by applying the correct tax to billable work and expenses instead of calculating it manually on every bill. Clio Manage lets your firm set a primary and a secondary tax rate, choose whether each applies to bills by default, and apply or remove tax on an individual bill or line item. The result is a bill that carries the right tax for your jurisdiction without manual correction.

Add tax rates

1. Go to Settings > Billing > Taxes.
2. Click Add a tax rate.
3. Enter a unique name and the tax rate, using up to four decimal places.
4. Select the country and state or province where the tax applies.
5. Click Create tax rate.

Set primary and secondary tax rates

Your firm can create up to 15 tax rates. Each rate is available to select when you create an expense entry or generate a bill.

1. Go to Settings > Billing > General, and scroll to Taxes.
2. Under Primary tax name and Primary tax rate, enter your primary tax name and rate.
3. Optional: Check Apply primary tax to all bills by default to apply this rate to every new bill.
4. If your firm uses a second tax, enter a Secondary tax name and Secondary tax rate, and check Enable secondary tax to make it available on bills alongside the primary tax.
5. Optional: Check Apply secondary tax to all bills by default to apply this rate to every new bill.
6. Scroll to the bottom and click Save changes.

Set default tax rate

Invoice tax defaults are the rates Clio Manage suggests on new bills.

1. Go to Settings > Billing > General.
2. In the Taxes section, click the down arrow and select a tax rate you added.
3. Optional: Click + Add an additional tax default to add more than one default tax rate, then select the additional rates from the dropdown.
4. Click Update settings.

Configure compound tax logic

The secondary tax rule sets whether your secondary tax calculates on the bill's pre-tax subtotal or compounds on top of the primary tax, for jurisdictions that require compound tax.

1. Go to Settings > Billing > General, and scroll to Taxes.
2. Under Secondary tax rule, select how the secondary tax calculates.
3. Scroll to the bottom and click Save changes.

Apply tax by activity category

You can set a default tax treatment on each activity category so related activities carry consistent tax. See Set Up Activity Categories.

Edit or delete tax on a bill

You can delete any tax rate that is not set as the default, not added to a time or expense entry or category, and not on an unpaid invoice.

Edit a tax rate

1. Go to Settings > Billing > Taxes.
2. Click the edit (pencil) icon next to a tax line item.
3. Update the name, tax rate, country, and/or state or province.
4. Click Edit tax rate.

Delete a tax rate

1. Go to Settings > Billing > Taxes.
2. Click the delete (trash can) icon next to a tax line item.
3. Click Delete to confirm the action.

Manage tax exemption

If your firm is exempt from sales tax, send your tax exemption certificate to tax@clio.com for processing.

Up next

Create and Manage Bill Themes: Design the visual layout of your invoices.