thread Re: tax exemption for totals above a specific value in Feedback Discussions

tax exemption for totals above a specific value

Clucas — Sun, 30 Aug 2026 22:41:47 GMT

In my city (Wasilla, AK) we are to charge 2.5% on the first $500.00 and no tax after that. How do I exempt taxes after the $500 value is reached on an invoice?

Re: tax exemption for totals above a specific value

rtfulk — Mon, 31 Aug 2026 20:43:48 GMT

@Clucas Yes, you should be able to do this with a Square tax rule.

In Square Dashboard go to:

Settings → Account & Settings → Payments → Sales taxes

Open your Wasilla 2.5% tax, then add a tax rule based on the total price. Square now supports tax exemption or reduction rules based on item price, total price, quantity, and other conditions.

Your goal is to have Square charge 2.5% on the first $500 only, so the tax should never exceed $12.50 on a single transaction.

One caution: make sure the rule is configured as a reduction/cap, not simply “make the whole sale tax-exempt once it exceeds $500,” because that would incorrectly remove the tax from the first $500 too.

If Square’s rule builder does not give you a way to preserve the first $500 as taxable while exempting only the amount above $500, I’d contact Square Support and ask specifically about a tax cap / maximum taxable amount rule for Wasilla, Alaska.

Here is Square's documentation on tax rules.

https://squareup.com/help/us/en/article/5622-use-conditional-sales-tax-rules-with-the-square-app?msockid=3c983b9344e36e151de62d5c45606f40&utm

Re: tax exemption for totals above a specific value

Clucas — Mon, 31 Aug 2026 21:56:37 GMT

I agree that you should be able to do this. I can't seem to create a rule that does this.

Re: tax exemption for totals above a specific value

rtfulk — Tue, 01 Sep 2026 19:30:45 GMT

I see what you mean, in the Exemption the wording is if the item is under a certain amount, you need it to be over a certain amount. I would fill out a feature request and hope they could add it, I would think that would be an easy thing to add. Below is the link to feature requests.

https://community.squareup.com/t5/Feature-Requests/idb-p/product-ideas