Sales Tax Q&A: How can we improve sales tax settings?

[Tom]

On November 10th, 2021 we hosted a Q&A with our Commerce Platform team which focused on sales tax settings.

The Commerce Platform team manages the sales tax product experience: everything from configuring tax settings in the online Square Dashboard to applying taxes to a sale, reporting, and filing.

One of the main goals of this event from our side was to ensure you're getting the most out of your tax settings and identify where Square can improve. We can't share out specific details on our product roadmaps, though we will certainly make sure all of the replies that came through on this post are considered as we iterate. Thank you to everyone who participated!

[sqnick]

Hey @midwest-aromas. Thanks for the feedback. I am interested in what you are doing today as a workaround?

[midwest-aromas]

By using a calendar or event flyers saved to my phone or computer, I calculate the before tax sales made in that zip code when doing my sales tax reporting.

Online sales will charge local tax correctly based on my & the customer's shipping address. While for in person sales at events, I think square just charges based on my registered address. Sometimes I may be losing money during sales tax reporting if the event city's local tax rate is higher than my local tax rate.

[Amyeichlerart]

Hi! Just a fellow business here… I operate both online and mobile with different sales tax rates like you do. Have you manually entered the sales tax rates in your settings? When processing an in-person sale, just toggle on the sales tax rate that applies to the location you’re selling from at that time. Square doesn’t automatically apply sales tax rates based on your registered address for in-person sales (they only apply the rates you have manually entered and toggled “on”). Check under your settings and manually add tax rates as needed when you are selling mobile. Then just make sure they’re all toggled “off” until you’re selling in that city/county. 

[florencews]

Thanks, Amy. If we toggle on a sales tax while at a remote location will this apply to only the salesperson logged in there? We will still be selling from the store at the same time and need to keep the other tax rate active there. The only difference is the salesperson login.

[Amyeichlerart]

When I toggle on a sales tax during an in-person sale, it does not affect any other item or future transactions. I would imagine that this would not affect any other device that’s logged in with a different user. Same situation if you had multiple permanent locations. They shouldn’t mess with each other. Since the majority of my sales are from different mobile locations, I always scroll down and apply the correct tax to each sale. You can “hide” inactive taxes in settings without deleting them. I have around 20 active tax rates visible on my end (but not “applied to all” items, just active and eligible to be applied). Does that clarify?  You may double check with Square in case your situation is unique, but I do this with every transaction and it’s as quick as one toggle-on. 

[midwest-aromas]

Nice solution, I just can't forget to do it before/at each event.

[CobbleCo]

Our state has a maximum sales tax of $35 on the first $500 of any single item purchased.  I’d like to have a report that itemized these purchases for quarterly sales tax reports.  Right now I just look through every sale for the 3 months in order to do my sales tax calculations.  

[sqnick]

Thanks for the feedback @CobbleCo. I believe this ask is similar to this post. We are tracking a seller need around taxing partial amounts that I believe would include the case you mentioned.

[mamajama]

I did the new POS upgrade and cannot find the sales tax or offline information

[sqnick]

Hey @mamajama. Sales Tax setting on mobile are under Settings > Checkout > Taxes

[mamajama]

did the POS upgrade and cannot find taxes or offline

[HC_Charlie]

Hello @Tom, I previously added a comment in this tread, but as I was doing my end of the month report for Oct saw something that made me curious. I only have one sales tax item set up (the first "PA Sales Tax"), but in my report I'm seeing two items for taxes (an additional line called "Pennsylvania"). One appears to only be from maybe one transaction??? not sure because I can't get to that specific transaction to research it. I'm wondering if this was an online sale, and somehow the online website is set to calculate taxes differently than my POS in-store....so that's why I'm seeing these two lines in the tax report? Any way to consolidate? Just would be easier if I didn't have to manually add these in my own report.

[Amyeichlerart]

This!  I'll be writing my own separate questions but as a seller who operates in a state that has varying taxes for each city, SALES TAX REPORTS via Square need an upgrade.  Charlie, you are correct in that "Pennsylvania" is your online sales.  Online sales tax is automatically calculated based on the shipping/delivery/pickup location.  Thankfully you live in a state that sales tax is the same everywhere.  My reports are a nightmare... 🤣

[sqnick]

Thanks for the feedback! We are looking at ways of improving these reports, especially for sellers who ship items to multiple different tax jurisdictions. In an ideal world what data would you like to have in these reports?

[GlassDistillery]

I'd love it if there were a "Fee" section or option under the taxes. Currently we have to add the "fee" as a retail category and it's counted towards out total sales. This is different then a service charge as that it applies to certain SKUs. It would be great to offer the Taxes as either a percent base or a number amount. Some products in this state (WA) require both, so that would be a HUGE help.

[divyar]

@GlassDistillery,

Thank you for your feedback. Regarding your first request, can you help us understand the fee you are trying to create? Is this for bottle deposit? We are working on a similar feature on our service charges roadmap and would like to make sure we understood the use case right. % + amount tax is on our roadmap.

[thatsabeta]

Allow modifiers to be connected to an inventory item. 

[GlassDistillery]

Sure, but can this be done and not have the fee "modifier" be taxed, too? This fee cannot legally be taxed.

[BurnBrosBrew]

Modifiers get taxed at the rate of the main item.  We are using modifiers for the bottle deposits at our brewery, as sometimes people need new bottles, other times they are refilling.  Then we fix it in our sales tax reports and in QuickBooks, as they are a non-taxed item.

[Ninjarita]

While the business is mostly online, and not via POS, I haven't been able to test it offline. I can only test the tax by making purchases. It's a hassell to have to check the sales tax for the POS vs Online. We were charging sales tax twice for each purchase for awhile and didn't know until it was angrily pointed out.

Now, the automatic state tax is turned off- and all taxes are "created by us instead. It took a really long time to get it right, mostly because I didn't know I had to check two areas. Then I found out you could create your own taxes, so I tried turning off the automatic state taxes and just using the DIY taxes. I believe this is what we are using now. Looking back at the reports, I am thankful all of the variations of taxes are kept track of. 

Also, creating a new item doesn't auto default to last taxes used, and these have to be turned on. I end up duplicating items just so I don't have to manually add the taxes.

[e2designz]

I have a Wix store.

how do i get square to stop charging tax on shipping on my online sales.

it should just charge tax on the items purchased.  Not include shipping as part of the sale.

thank you