[$250] Expenses - Unable to create an expense after selecting a valid tax rate

[jponikarchuk]

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Version Number: v9.3.6-0
Reproducible in staging?: Yes
Reproducible in production?: N/A - new feature, doesn't exist in prod
If this was caught during regression testing, add the test name, ID and link from BrowserStack: #78358
Email or phone of affected tester (no customers): agexptest+pr210126@gmail.com
Issue reported by: Applause Internal Team
Bug source: Pull Request QA execution
Device used: Windows 11/ Chrome, Samsung S23FE/ Android 16, iPhone 13 Mini/ iOS 26.1
App Component: Money Requests

Action Performed:

Prerequisites: Have two workspaces with taxes enabled. One of them is the default workspace.
Add a new tax rate to the default workspace.

1. Launch the Expensify app
2. Go to selfDM
3. Create a new tracked expense
4. Set the tax rate to the newly created one
5. Tap on Submit to someone
6. Choose a different workspace with tax enabled
7. Fill in the merchant if needed
8. Tap on "Create X expense"
9. Verify that you see the error for the tax rate
10. Change the tax rate
11. Verify that after changing the tax rate no error appears and you can submit the expense

Expected Result:

The error message disappears, and the expense is successfully created.

Actual Result:

Unable to create an expense due to the error message.

Workaround:

Unknown

Platforms:

• Android: App
• Android: mWeb Chrome
• iOS: App
• iOS: mWeb Safari
• iOS: mWeb Chrome
• Windows: Chrome
• MacOS: Chrome / Safari

Screenshots/Videos

1.mp4

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Issue Owner

Current Issue Owner: @

[melvin-bot]

You have been assigned to this deploy blocker because you recently merged this PR: #78358

[melvin-bot]

💬 A slack conversation has been started in #expensify-open-source

[melvin-bot]

Triggered auto assignment to @johncschuster (Bug), see https://stackoverflow.com/c/expensify/questions/14418 for more details. Please add this bug to a GH project, as outlined in the SO.

[github-actions]

👋 Friendly reminder that deploy blockers are time-sensitive ⏱ issues! Check out the open `StagingDeployCash` deploy checklist to see the list of PRs included in this release, then work quickly to do one of the following:

1. Identify the pull request that introduced this issue and revert it.
2. Find someone who can quickly fix the issue.
3. Fix the issue yourself.

[OSBotify]

🔍 Investigation Summary

Classification: Frontend bug
Causing PR: #78358 - "fix: revert revert taxes field" by @koko57 (High confidence)
Related Issues: None

Recommendation: REVERT

PR #78358 should be reverted. While it adds important tax validation for track expenses, it has a critical bug where tax validation errors are not cleared when the user selects a valid tax rate, making it impossible to submit expenses.

Labels: Removing DeployBlocker since this is a frontend bug. Keeping DeployBlockerCash.

📋 Detailed Analysis

Evidence

PR #78358 introduced tax tracking functionality for expenses being moved from track expenses to workspaces. The issue occurs in the exact scenario described in the PR's test plan (step 10-12 of the "Submitting the expense to a different workspace with taxes enabled" section).

Verification

The bug is in /src/components/MoneyRequestConfirmationList.tsx:

Lines 970-973 - Tax validation that sets the error:

if (shouldShowTax && !!transaction.taxCode && !Object.keys(policy?.taxRates?.taxes ?? {}).some((key) => key === transaction.taxCode)) {
    setFormError('violations.taxOutOfPolicy');
    return;
}

Lines 458-461 - Example of clearing violations when user fixes them:

const isMissingAttendeesViolation = getIsMissingAttendeesViolation(...);
if (formError === 'violations.missingAttendees' && !isMissingAttendeesViolation) {
    setFormError('');
}

Missing logic: There is NO equivalent code to clear violations.taxOutOfPolicy when the user changes to a valid tax rate.

Root Cause

PR #78358 added validation to check if a tax rate from one workspace exists in another workspace (line 970). However, it failed to add the corresponding cleanup logic in the useEffect (around lines 441-463) to clear the violations.taxOutOfPolicy error when the user fixes the issue by selecting a valid tax rate.

The error persists because violation errors starting with CONST.VIOLATIONS_PREFIX are intentionally preserved across focus changes (line 453), but there's no logic to clear them when the underlying issue is resolved, unlike the violations.missingAttendees case.

This is a missing validation-clearing pattern that exists for other violations but was not implemented for the tax validation.