Any advice on how to deal with sales tax holidays/tax free weekend?

[DustBoutique]

While we can turn off sales tax completely for the duration of the tax free holiday, it should only take effect on items under $100 and only on certain items we carry on our store. Does someone have advice for a new-ish seller? This year is our first sales tax holiday. Any other businesses using square register have a recommended process or method of dealing with this? Any shared experience or advice is certainly welcome. It would seem having to go through our entire inventory to set the sales tax is a clunky, cumbersome process. Hoping there's a better way using square. Thx in advance

[dakotaharvest]

Without reprogramming all our items, the only way is to flip the little switch on a per item basis when you are ringing up items. As far as I know there isn't a nice way to do this with Rules regarding dollar value. Going to be a manual process.

[purplebutterfly]

This reply was created from merging an existing thread: Tax holiday - Any ideas on how to set large number of items or categories to non taxed?

Tennessee has a tax holiday coming up and for three days we don't have to collect tax on clothing, school items and other things. I found a thread from 2016 that said the only answer was to manually turn off tax on each item at point of sale as you rang them up. Seems like that will produce lots of errors. Anyone know a way to easily turn off tax on whole categories or lots of individual items and then turn it back on?

I'm guessing I may have to export Items list to a spreadsheet, change the tax settings and upload. Then re-upload the original items spreadsheet when tax holiday ends. Is that my best hope?

[Helen · Accepted solution]

Great question @purplebutterfly! 

There isn't a way to disable taxes by category. You can disable all taxes, or disable taxes from a specific item/or items.

To disable all taxes from the app:

1. Navigate to the Settings section of the app and then tap Taxes.
2. Tap on an active tax and toggle the switch beside Enabled off.
3. Tap Save. (From Taxes screen you'll now see 'Off' next to any disabled taxes.)
4. Repeat for any other active taxes.

To disable all taxes from your online Square Dashboard:

1. Click Item Library and then click Taxes from the options on the left.
2. Click on an active tax and then click on the switch beside Enabled to turn it off.
3. Click Save. 

From the Taxes section of your Dashboard you can also quickly disable a tax from a specific item:

1. From your Item Library > click Taxes and then click Apply to Items.
2. Search for an item or scroll through the list of items. 
3. Click on the check box to apply a tax. Or deselect the check box to remove a tax from that item.

Of course you'll need to set a reminder/make a note to enable your taxes again when the tax holiday is over. I'll share your request for a way to turn the tax off for a category or for a specific period of time with the Tax teams but I hope this helps in the meantime!

[littleprairie]

I get how to toggle the tax on and off but how does it affect our. Reports when we go to pay Sales tax and figure calculations 

does it say untaxed items in the report?

[Chad]

Hello @littleprairie! 

Have you had a chance to check out the Tax Report on the Square Dashboard? 

This report will display your taxable sales, non-taxable sales, net sales, and the total tax collected. 

[4beachshop]

Thank you but do you know if system keeps tracks of taxes not collected to report to state?

[Helen]

@4beachshop I don't quite understand what you're looking for, can you provide a bit more information about what you need? If you haven't collected tax for a payment you'd need to calculate that outside of Square. 

[Office2019]

Thanks 😊😘☺️

[shades-john]

Great questions @DustBoutique!

Thanks @Helen for the great answer. I started with your tips and realized that time has passed and Square has gone through several changes.

We have in Florida, already started "Freedom Summer Tax", which during the 2023 Florida Freedom Summer Sales Tax Holiday, you may purchase admissions to music events, sporting events, cultural events, state park annual passes, and fitness facilities, as well as certain boating and water activity supplies, camping supplies, fishing supplies, general outdoor supplies, residential pool supplies, children’s athletic equipment, and children’s toys exempt from sales tax.

The current version of Square allows me to create a rule for those items that are tax exempt, by items. You can also setup a rule for amounts above or below a certain value, including selecting individual items or selecting categories.

This is where I started: https://squareup.com/dashboard/business/manual-taxes

If you have created a Tax Rule, click on that rule to see your options including the "Exemption" rule. If not use the "Create Tax" then setup your exemption.

Let me know if this worked or reply with didn't work.

Thanks.

John

[DiemandFarm]

In Massachusetts, we have to report what taxes would have been charged. Therefore, just turning off the taxes does not work. The only solution that I can come up with is to create a variable dollar amount discount key and enter the tax amount as a discount on each sale.  Then at the end of the month when we go to enter the taxes paid into quick-books, subtract that discounted amount from the total sales tax paid for the month and then add it on the separate line for tax free weekend sales. Can anyone come up with a better work around?

[kellyj]

@DiemandFarm

I think your work around will work for the requirements for MA.  The variable discount will allow you to still see your tax reporting so it's accounting for, but also show that was taken off the sale. Might make for more clear numbers for you overall.

[SoC1]

Nearly half of my SKUs need to be tax free over the Tax Holiday weekend. School supplies under $20 are tax free in VA. I need a better solution to this problem for my cashier. Being able to put items into multiple categories to easily batch select the items and then allowing either a tax rule for tax free holidays or allowing us to batch edit the tax on specific items in a category would be wonderful.

[Hommelson]

Is there EVER a positive response to issues that hugely effect our small businesses? I'm really thinking "no."

[kjc2]

Please work on a way to turn off taxes by category.  It's so time consuming to go through and 'apply to items'.  This shouldn't be such a manual and labor intensive process.  

[LulusOnMain]

Has there been any updates to the taxing by category? 

Illinois has added a holiday tax that decreases tax on certain categories by 5% 

As a "Gift Shop" I don't have to participate, but why wouldn't I? Why would I let Big Box get all the sales?