Sales tax not reported on partial returns?

[SweetMod]

There are times when our store needs to refund partial amounts of an item's purchase price. To do this, we use Square's "Refund by amount" form. This form requires that we enter a single number that includes the amount that we are refunding plus the sales tax that would have been charged on the refunded amount.

For example:

Customer purchases $100 item and is charged $6 in sale tax, for a total of $106.

We want to refund $50 of the item's price. Square's "refund by amount" form has us enter $53 ($50+$3 sales tax) as a single sum. It does not separate the refunded sales tax amount at all. 

As far as I can tell, in our reports, there is no way to tell the difference between the $50 refund and the $3 sales tax, which we should not pay to the state at the end of the month. Square does nothing to separate the refunded item price and sales tax in their reports. Is there something that I am missing? Do I have to remember every partial refund and manually calculate the sales tax for them at the end of the month? This seems like a significant missing feature.

When issuing a refund, why not have me enter the amount that I want to refund from the item price ($50 in this example) and then have a checkbox for me to click to calculate the amount of sales tax that needs to be refunded ($3 in this example). This approach would be very similar to how you add a variable price item to an invoice, which has a checkbox to add sales tax to the item.

Thanks,

Ron

[JJ_]

Hi and welcome to the Seller Community! 👋

This would be considered a feature request at this time, @SweetMod. We work hard to listen to our Sellers needs and make sure that our platform provides the best experience. I also would like to invite you to join our Beta Community so you can take a look (an even be able to participate) in what our Product teams are working on for future releases!

[SweetMod]

I suppose that I am more confused why keeping track of the sales tax associated with a partial refund isn't already part of the system. I don't so much see it as a "feature" as something that should be basic functionality of any POS. Square tracks the sales tax in so many other circumstances. Why is this the one instance where the system refuses to differentiate it from the item's price? When would a business ever not want to know the accurate amount of sales tax that they owe? What is even more frustrating is that it has taken me months to realize that Square was doing this wrong and causing me to pay more sales tax than I actually owed.

[JJ_]

This sounds like a good question for our Support team, @SweetMod

They can take a look at your account with you to help a shine light here. Since we don't have the ability to discuss account-specific details with you openly here in the Seller Community, please reach out by phone or email when you have a moment by logging into your Square account and heading here.

[luvtbeach]

As sweetmod said this should be part of the system and not a feature request.  We are asking the system to do what it already should do.

[JJ_]

Thank you for taking the time to share your interest in this @luvbeach. The reason this works this way is that Square is required to report your Gross Sales and Taxes whenever it files a 1099-K for your business (if applicable). For this reason, refunded transactions will not affect the reported Sales Tax because we will report the Gross amounts and not the net amounts.

I hope this information makes sense and clarifies why this is considered a feature request and not a currently active feature.

[luvtbeach]

I have the same issue and every one else who gives partial refunds are in the same boat "if" they are sending in their state taxes every month.  I have to make a copy of my paperwork with the partial refund and the tax amount and put it into my tax folder to subtract the amount and tax amount from my monthly state tax report (pain in the ...) This should be a simple check box to refund the taxes on the partial amount so square does it for you and calculates it on you tax report and sales in square.