[$250] Report - "Workspace Rules" system generated message displayed after editing tax rate manually

[jponikarchuk]

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Version Number: 9.3.24-1
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: #71244
Email or phone of affected tester (no customers): ibellicotest+2250@gmail.com
Issue reported by: Applause Internal Team
Bug source: Exploratory - Significant User Experience Deterioration
Device used: Motorola MotoG60 / Android 12 (Hybrid app) - Windows 11 / Chrome
App Component: Money Requests

Action Performed:

Prerequisite: Account has a workspace with rules enabled.
Prerequisite 2: Taxes enabled and at least two taxes different from default one created.

1. Open the Expensify app.
2. Navigate to "Workspaces" > "Rules" > "Add Merchant Rule"
3. In "For expenses with", add any merchant.
4. In "Apply these updates", add a category, a description and a tax rate different from default one.
5. Save the rule.
6. Navigate to workspace chat.
7. Create a manual expense with merchant added on step 3.
8. Open the just created expense.
9. Note that a "Set the category to XX, description to XX and tax rate to XX via workspace rules" system-generated message is displayed on report.
10. Tap on "More" > "Add Expense" > "Create Expense"
11. Create a new manual expense with a different merchant and same "Tax Rate".
12. Select the first created expense.
13. Tap on dropdown menu > "Merge"
14. Select the second created expense.
15. Keep all the details from second expense and finish the merging flow.
16. Once redirected to report, edit the "Tax" field and select another tax different from default one.
17. Note that "Workspace Rules" system generated message appears again.

Expected Result:

"Set the tax to XX via workspace rules" system generated message should not be visible if "Tax" field is edited manually.

Actual Result:

"Set the tax to XX via workspace rules" system generated message, is displayed after merging expenses and editing the tax rate manually.

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: @suneox

Upwork Automation - Do Not Edit

• Upwork Job URL: https://www.upwork.com/jobs/~022025826398769155949
• Upwork Job ID: 2025826398769155949
• Last Price Increase: 2026-02-23

[melvin-bot]

You have been assigned to this deploy blocker because you recently merged this PR: #71244

[melvin-bot]

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

[melvin-bot]

Triggered auto assignment to @trjExpensify (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: #71244 - "Enable users to select tax rate when merging expenses, auto-calculate tax amount" by @dominictb (High confidence)
Related Issues: None found

Recommendation: REVERT

PR #71244 adds tax rate selection support to the expense merge flow. However, it introduces a bug where manually editing the tax rate after merging expenses incorrectly triggers a "Workspace Rules" system message, even though the user manually edited the field. This suggests the transaction state after merge is not properly tracking that manual edits should not be attributed to policy rules.

Labels: Keeping DeployBlockerCash (App PR caused the issue), removing DeployBlocker if present

📋 Detailed Analysis

Evidence

• The issue explicitly references PR [Merge] Merging tax rates #71244 in the reproduction steps and bug report
• The bug is specific to the merge flow: "after merging expenses and editing the tax rate manually"
• The bug did not exist before this PR - it is a new feature that does not exist in production

Verification

PR #71244 modified the following files related to tax and merge functionality:

• src/libs/actions/MergeTransaction.ts - Core merge action logic
• src/libs/MergeTransactionUtils.ts - Tax field handling in merge flow
• src/hooks/useMergeTransactions.ts - Added tax policy tracking
• src/components/ReportActionItem/MoneyRequestView.tsx - Added taxName display logic
• src/types/onyx/Transaction.ts - Added taxName field to transaction type
• src/types/onyx/MergeTransaction.ts - Added tax-related merge fields

The PR introduced taxName tracking and modified how tax rates are selected and stored during the merge process. The issue manifests when:

1. Two expenses with workspace rules applied are merged
2. The merged expense is then manually edited to change the tax rate
3. The backend/frontend incorrectly shows a "Workspace Rules" message for the manual edit

Root Cause

After merging expenses that had workspace rules applied (step 9 in repro: "Set the category to XX, description to XX and tax rate to XX via workspace rules"), the merged transaction retains some state that causes subsequent manual edits to be misattributed to workspace rules.

The transaction likely needs to clear the policy rules attribution when manual edits are made post-merge, or the merge flow needs to properly reset the policy rules state when creating the merged transaction.