Hi @PSGC. Sorry for the delay in getting back to you. I actually had to set up a test plan and go through the process to be sure I was on the same page as you! (I don’t use Subscriptions, but I have access to them). Anyway, you actually brought up two distinct issues here, not just one. Allow me to address them individually.
Inclusive Sales Tax
You’re definitely correct that you have identified a Catch-22, here. The problem is that Square made the decision to add inclusive sales taxes at the Subscription level rather than at the Plan level where it should be. Because of this, online/checkout link subscriptions are left out of the taxing scheme. I might have a short-term solution, which I will outline below, along with the gotchas of that solution.
When Tax Rates Change
Again, you, I see another bad Square decision here to just ask for a tax rate that is not already in our list of tax rates tied to our accounts. This one has no short-term solution, I’m afraid.
The Long Term Solution
Sumbit two feature requests here, on the Subscription Board. The first one would be to move the inclusive taxes from the Subscription to each Plan, which would fix your online/checkout link issue. The second one would be to allow you to either enter a sales tax rate OR to choose from one of your pre-defined sales tax rates. This would fix the issue of ever-changing sales tax rates in the future. I’ll emphasize, these are two distinct feature requests. Resist the urge to submit them as one or you’ll just slow down the request evaluation process.
The Proposed Short Term Solution
Go back to your Plans and change the amounts on each of them to include the sales taxes required. Then when you share the checkout links, that amount will be included. You’ll also need to change any current manual subscriptions to remove sales tax from them so that your customers aren’t double-taxed.
The advantage to this solution is that if the sales tax rate changes, you can just change the plans and the rest will be taken care of, as far as your customers are concerned. They’ll just see the new amount.
One gotcha. I’m assuming that you do not already use inclusive sales taxes, but rather that you add sales tax as a separate line item for the rest of your operation. Each month when you pay sales taxes, you are going to have to total up subscription payments and determine how much of that amount you need to add to your sales tax report/remittance. That’s easy enough to do. Let’s say that you have a 6% sales tax rate, and you sold 10 subscriptions that were $100 each + $6 sales tax, for a subscription price of $106. To determine how much of your subscription sales were sales tax, you’d divide $1,060 (10 subscriptions) by 1.06, then subtract that from $1,060. See my work below.
A) Subscription price = $106 ($100 plus $6 sales tax, each)
B) Subscription payments this month = 10
C) Subscription Sales = $1,060
D) Actual Subscription Sales = $1,060 / 1.06 = $1,000
E) Sales Tax = C - D = $1,060 - $1,000 = $60
F) Adjust your sales on your tax report (downward) by E, and your tax due (upward) by E
It’s not as bad as it looks. Hopefully that helps.
Ugh. You just found the hole in my workaround. It doesn’t look like you CAN edit plans right now, at least not plan prices. To change prices you are going to have to create an entirely new plan. That looks like yet a third feature request, unfortunately.
Which reminds me… when you submit all of these requests, please send me the links to them. I will definitely upvote them and add my support/comments!
This is not good. It means you’ll have to cancel existing subscriptions if the sales tax changes. That’s not a good system at all! Ugh. Just forget my short term workaround. And I’m out of ideas until Square fixes this.
Thank you! I’m sorry I couldn’t come up with a workaround. No doubt I’ll keep thinking about this as I’m making ice cream today. Maybe my brain will find something I missed!
