If an invoice is outstanding, the customer is responsible for the amount due. However, if there is an upcoming sales tax rate change, complete the following steps:
Inform the customer that a tax rate change is happening on date X, and give the option to pay immediately to avoid paying more.
If refused, add a line item to the invoice with the additional tax change, detailing the additional tax due. For example:
- Pre-tax amount due: $10,000
- Initial sales tax (8%): $800
- Change in sales tax (+1%): $100
- New amount due: $10,900
- Remind the customer again of the option to pay early. If nothing is done, issue the new invoice.
On the other hand, you can take the extra tax added as a loss on all outstanding invoices, ensuring that customers pay exactly what was due at the time when their invoices were generated.