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!

[akmatthews]

Hi @e2designz

Thanks for your feedback. Can you tell me more about how you’re setting up the taxes for your online sales? If you have a Square Online site, you can uncheck the box in your Online tax settings labeled “Charge taxes on shipping rates.”

More information here re: Wix and Sales Taxes.

[GoodDogTruck]

Will all responses be available for viewing after November 10th?

[Tom]

Hi @GoodDogTruck! Yes, all responses will be available within this thread after November 10th and you'll be able to refer to this post as a resource after the Q&A wraps up. 💯

[BurnBrosBrew]

It would be really helpful to be able to combine a non-tax item and a taxed item into one grouped item, and have the tax collected appropriately.  An example would be selling a growler of beer.  The bottle deposit is non-taxed, and the beer has local as well as liquor tax.  In order to set up our online store during the pandemic for curbside pick-up, we had to re-do all of the to-go beer with "new bottle" or "bottle return" as modifiers, and square doesn't collect the correct tax on the new bottle version (separate from the rounding issue), as it collects tax for the $5 non-taxed deposit that is part of that item.

[lihui]

Hi @BurnBrosBrew,

Bottle deposits can be set up as a service charge, with no sales taxes applied, and be manually applied at checkout. We’re working on an auto service charge solution.

[cbm]

When I create an item via online/my website it gets added to my pos system at the same time.  The one annoying thing is I then I have to go to the pos and add sales tax to all of the items I just added.  It would be nice to skip that step.

[divyar]

@cbm, 

Thank you for your feedback. We are actively working on syncing Online taxes with Square taxes. Unfortunately, we are unable to share the exact timelines.

[TheWilander]

We would love the option to have the total sales tax amount that is collected at the end of the day to be deposited into a separate bank account that we pay our state tax amount out of.

[divyar]

@TheWilander, 

This feature request is on our radar.  With Square savings you can create a dedicated folder to hold your collected taxes. https://squareup.com/us/en/banking/savings. You might have to do the tax amount calculation yourself at this point.

[sheepy_weepy]

Tax-free weekend was a nightmare for us. I'm in Texas and I don't know about other states, but for my state, tax-free weekend only applies to certain items and for the Friday - Sunday of the weekend. In order to make it work this year, we manually went through our items to moved them to a new category called "Tax-free weekend" so when Friday midnight came, we unclicked sales tax and then midnight Monday we clicked it back on. Then from there, we slowly put the things back in the correct category. The downside of this is looking back on my sales report, it just says items that were purchased were in the "tax-free" category and not divided into it's original category.

[divyar]

@sheepy_weepy,

Sorry to hear about the trouble you had. Alternatively, you can disable a Tax from Actions > Disable Tax on the top right corner of Edit Tax modal. When a Tax is disabled, it will not apply to any of your transactions. To re-enable, you will have to come back to the same Actions menu to enable Tax. Will this work for you?

[sheepy_weepy]

No this doesn’t work. 

So for tax free weekend, it’s the state mandated weekend where items relating to back to school items are sales tax exempt.

There are select items that are tax free. Like a book won’t be tax free but a notepad will be. Another example is different items within like an accessories category: we sell hats, jewelry, socks, sunglasses. However, only two of these items will be state mandated to be tax free. I guess theoretically I could make two accessories categories for luxury/essential but that’s a lot of work especially if I only have a few variations of each item. 

[sqnick]

One thing that we suggested to a seller this past summer was to set up an 'In Store' dining option and then create a Tax Rule and exempt all of you tax free items. Then once the tax holiday is over delete the tax rule. 

Help Article: https://squareup.com/help/us/en/article/5622-use-conditional-sales-tax-rules-with-the-square-app

[sheepy_weepy]

I'm pretty sure the way I did it was a lot easier and less confusing. Why would I set up dining options for a retail shop?

[sheepy_weepy]

Here is the TX state comptroller website explaining the tax free weekend : https://comptroller.texas.gov/taxes/publications/98-490/

It's an extensive list and besides specific items, there are also rules regarding to at what point things are taxed and so forth.

[sflickinger7]

It would be awesome if Square would automatically file Sales Taxes like it does with payroll taxes. 

[divyar]

@sflickinger7,

We have often heard of this request from our sellers. Updates to this are on our roadmap. Have you tried the marketplace solutions we have with third party partners? We would like to hear if this doesn't fit your needs.

[Geezer]

Is your team even aware of how sales tax works in the USA? I need the ability to say everything in our store is always taxable, unless the Customer has a Sales Tax exemption Certificate on file with us.

[divyar]

@Geezer, 

Customer based tax exemptions are on our roadmap. Unfortunately, we are unable to share timelines.

[Geezer]

They were requested years ago by multiple Customers. That's how far out your roadmap goes....

[butterflyam]

Due to the fact that I never took time to figure out how to set the automatic tax rate, I figure it, charge the total amount and at the end of the year, I figure 7% of my total sales and report that way.  Easy for me as I only have one tax rate to deal with.  I love have Square for my business.  Makes things so much easier!