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]

Thanks for the feedback @1klivreri1!

[AL3TECH]

Under the new tax regulations requiring companies such as Square to collect sales tax on transactions starting in January (included in the American Rescue Plan) but my services are tax-exempt in my state. How can I notify Square of this status and prevent them sending me a 1099-K?

[sqnick]

Hey @AL3TECH. I’ll see if I can get someone from our business tax team to provide some feedback here. My hunch is that even though items may be tax-exempt in your state, you would still receive a federal 1099-K if your total sales exceed the limit in the American Rescue Plan update.

[lm64]

As a non-profit college, we are exempt from paying sales tax on Weebly / Square. Why does it take up to 12 weeks to process this request? Thanks

[sqnick]

Hey @lm64. I’m a bit confused by what you mean here. Are you trying to disable taxes for your Square Online store?

[lm64]

When we purchased the Business Plus (Weebly E-commerce) plan, we were charged sales taxes, but we are a non-profit organization and every year I submitted a tax exemption certificate without any problems.  Until this year! It takes forever to get a tax exemption approval.  Thanks! 

AUTHORIZATION FOR AGENT TO PURCHASE
ON BEHALF OF EXEMPT ORGANIZATION
TO: SQUARE, INC. dba WEEBLY
1455 Market Street, Ste. 600
San Francisco, CA 94103

[RT32B]

Thanks for the Q&A's they sometime help and times not. It seems as if everyone is asking the same questions and not really getting answers.  What I have also found is that there are times even after I have entered my tax rate. It doesn't hold and then I'm re-entering the tax rate on different screens.  

[sqnick]

Hey @RT32B. This sounds similar to some of the above reported issues with Square Online syncing. At the moment, when you create an item in Square Online no taxes are automatically applied. You have to go back to either the tax page, or individual item page on the Square side to add taxes. We agree that this is less than ideal and are looking at ways to improve this experience.

[Amyeichlerart]

SALES TAX REPORTS

I'm surprised this question hasn't been asked yet as I've been dealing with this issue ever since Square Online started.  As a business in a state that charges different sales tax rates per city, Sales Tax Reports need to be corrected as sales taxes are being lumped together by state vs by the city/state rate that's being charged.  This makes monthly tax reports a nightmare.

My monthly Square reports show my in person and invoiced sales tax rates CORRECTLY itemized (obviously because they've been manually set), but ALL my online sales are grouped by state and not by the city (even though the city sales tax is correctly charged to the customer by Square Online).

The ONLY way I can correctly file and pay my monthly sales taxes is by running reports and pulling up the delivery city for every... single... online sale then adding those tax totals to their respective cities in my in-person and invoiced sales.  Being able to run a report of monthly online sales tax that correctly itemizes tax rates seems like an easy solution since Square Online is already correctly charging these various rates... why must it be reported as a lump sum?

[sqnick]

Yikes! We are working to fix this. We would like to follow up and discuss this further, but it sounds if Square broke out each individual State, County, City, and Special Purpose District tax separately in your reporting that would get you most of the way, is that correct?

[Amyeichlerart]

Thanks so much!  That would be great!  Just any way to identify tax amounts that are coming in without manually looking up each order.  I'm surprised that the correct rates per city are charged for online sales BUT aren't listed in the Sales Tax Report (they're instead all added together and listed by state).  Seems like if the data is already there, there would be an option to report it.  

I can't imagine how larger online businesses are dealing with this. If anyone else has an easier work around, I'm up for hearing it!  I've expressed my frustrations about this to the support team for years but there's never been a resolution.  I'm happy you are here to help!

[Kayakdan]

So happy to hear you are working on this! We just started using square and have been agonizing over this exact issue. Please let us know the update on the fix for this.

[wvbuggs23]

Maybe not the right forum for this question, but I am new to using square and I am wanting to add a service fee to all credit card transactions to offset the processing fee the business incurs when a customer uses a card.  How can I do this without charging those customers that are paying with cash?  Hoping this would not be something that I would have to manually add each time a credit card is used in my wife's salon.

Thank you

[Mistis_Jewelry]

You can offer a cash discount.  (I had this convo with my husband.)

[PiginaBag]

I was thinking the same thing. If there was away in the payment options section where you choose  what payment types you except. To have a slide button that could be turned on or off and would charge the customer the fee and not the seller so you don't have to create a surcharge. Because if I charge a surcharge to the costumer I am charged a little bigger fee and I don't think that should be right.

[Mistis_Jewelry]

Hi Tom, My question is about online selling.  I use the website services you offer through Weebly.  Say someone from another city and tax rate buys something online, what tax rate will they pay?  With Amazon, my tax rate where I live applies to the items I buy.  How does that work on my website? Is there something I am supposed to do?

And what if I am at a show in another city and turn on the tax rate for that area on my POS, but someone buys something online while I'm gone.  Does the tax rate follow my location or is it supposed to be according to theirs? Or are they separate?

Thanks for your help.

Misti  😃

[Socksnlaces16]

I'm in Massachusetts and while we do not have state sales tax on clothing items, we do have tax on any amount over $175. Since we are a resale store working with sneakers that can cost more than $1000 and clothing that is usually 200, we don't have a way to apply our sales tax to JUST the amount over $175, ie: sale is $200, only $25 of that should be taxed, not all $200.

[divyar · Accepted solution]

Hello Everyone,

Thanks again for taking the time to share your questions and feedback!

We hope your questions are answered—the experiences you've shared will help us as we continue to make improvements on Sales Tax settings. With that, I wanted to highlight a few themes from this discussion:

A few of the feature requests that you mentioned are coming soon and available for Beta

• Category based Tax configuration
• Exemptions based on the Item price
• Exemptions based on the total price of a few items in the cart

To request for Beta participation, please send a Private Message to @divyar if you would like to talk further.

General information about available features

• Dashboard Sales Tax has a new location and experience. To manage Sales Tax, go to Accounts and Settings > Business > Sales Tax on Dashboard. Read more in our Support Center: Create and Manage Your Sales Tax Settings.
• We offer the ability to Disable a Tax temporarily. This can be used for tax holidays, when you open a booth at a different tax location and want the POS tax rate to not apply on the cart.
• Sellers who include the tax in their item price can turn on the tax inclusive toggle in the Sales Tax page for accurate tax calculations.
• With Square savings you can create a dedicated folder to hold your collected taxes.

Other top asks we heard from you which we are working on solving for 

• Square Online Taxes do not sync with POS taxes
• Customer Based Tax Exemptions

We appreciate you taking the time to share and we'll continue to iterate Square’s products based on your business needs. To stay up-to-date on new feature launches, keep watch on the Product Updates board.

[vanhook]

In our grocery store the vast majority of items are not taxed.  I need sales tax to be active of course for the small number of items that are taxable, but it would be great if the default for adding a new item would be for the tax to be toggled OFF. 90% of the products we add, we have to remember to then turn the tax off, and its a step that gets missed by some team members. Can I set this as the default without turning off sales tax entirely? 

[mikegodwin]

Very late to this discussion but I have a sales tax question. I sell a product online and at markets. If someone at a market buys an item & ships it to an out of state address they pay the sales tax at the time of purchase. If the same person buys the same item online and has me ship it out of state for them they pay no sales tax since sales tax is figured on the shipping address and not the billing address. Maybe I'm wrong but that doesn't make any sense. Any plans to change this? Thanks