ALTER FUNCTION CalcTax (@TaxType VARCHAR(3), @InvoiceDate DATETIME, @Amount MONEY)
RETURNS DECIMAL
AS BEGIN

DECLARE @TaxPercent DECIMAL
SELECT @TaxPercent = Tax_Percent FROM Tax_Table TT
WHERE TT.Tax_Type = @TaxType
AND TT.Effective_Date =
  (SELECT MAX(Effective_date)
  FROM Tax_Table T1
  WHERE T1.Tax_type = TT.Tax_Type
  AND T1.Effective_date <= @InvoiceDate)

RETURN (@TaxPercent)
END

GO

SELECT dbo.CalcTax('TED', '1996-01-01', 123.12)