Which statement correctly describes the standard order for configuring company taxes?

• A. You set up Federal first, then State, then Local
• B. You set Local first
• C. You set State first
• D. You set Local last

Answer: (A)

Configuring taxes in the order from broadest to most specific follows how tax rules are defined and applied. Federal taxes establish the nationwide framework that always applies. Once those are in place, state taxes define the rules, rates, and brackets within each state you operate in, providing the regional context for calculations. Local taxes depend on the state and jurisdiction data, and often require the state context to determine the correct local rates and applicability. Setting up in this sequence—Federal first, then State, then Local—ensures the system can correctly reference the appropriate rules at each level and apply them in the proper order.