thread Re: Do I apply sales tax to the original price or the discounted price? in Archived Discussions (Read Only)

Do I apply sales tax to the original price or the discounted price?

CherryBerry — Tue, 14 Nov 2017 22:29:35 GMT

The title of this thread was updated from its original title: “How to apply sales tax before applying discount”.

Am I missing something in the settings? I cannot figure out how to get square to apply the sales tax PRIOR to me applying a discount. When I give a discount on products, the tax still needs to be charged according to full price of the products. However square applies tax AFTER the discount, which is incorrect. Is there a way to correct this?

Re: Do I apply sales tax to the original price or the discounted price?

RHatch — Tue, 14 Nov 2017 22:29:54 GMT

What state are you in?

Re: Do I apply sales tax to the original price or the discounted price?

CherryBerry — Tue, 14 Nov 2017 22:30:06 GMT

I'm in oklahoma.

Re: Do I apply sales tax to the original price or the discounted price?

RHatch — Tue, 14 Nov 2017 22:30:20 GMT

Oklahoma Tax is after sale, discounts or coupons from the retailer, The only time you tax before is if the coupon is from the manufacturer and they are sending you the money for the discount.

Here is the link to the Oklahoma tax document. Just search Coupon or Discount in the document. Page 23 is one of the pages that talks about Coupons.

Re: Do I apply sales tax to the original price or the discounted price?

CherryBerry — Tue, 14 Nov 2017 22:30:35 GMT

You are so amazing! Thank you so much!!!

Re: Do I apply sales tax to the original price or the discounted price?

pamvosh — Tue, 14 Nov 2017 22:31:26 GMT

This reply was created from merging an existing thread: “How Do I Apply a discount to only certain items in a transaction (currently discount applies to all)”. The original author has been notified via email.

I do not want the discount to come off the tax for the total retail amount. Can this be done?

Re: Do I apply sales tax to the original price or the discounted price?

LocavoreStore — Tue, 14 Nov 2017 22:31:55 GMT

Before check-out, select the item that you want to discount. You will see some of the usual stuff, but at the bottom of that page, there will be a list of all the discounts that you have set up. You can toggle on as many of them as you want, and the discount/discounts will only be applied to that item.

Re: How Do I Apply a discount to only certain items in a transaction (currently discount applies to

pamvosh — Mon, 13 Nov 2017 14:35:14 GMT

Is there a way to tax the item on the original price without it doing tax on just the discounted amount

Re: Do I apply sales tax to the original price or the discounted price?

Russell — Tue, 14 Nov 2017 22:33:38 GMT

Hi @pamvosh -

I'm not well versed on most sales tax laws and understand they can vary by neighborhood or city or county.

With that said, I've never seen the practice of charging tax on the original price rather than the discounted price anywhere that I have made a purchase (local or travelling).

I'm curious about this, do you have an example of when you would need to charge tax on the original price and not the final price?

Re: Do I apply sales tax to the original price or the discounted price?

CherryBerry — Wed, 15 Nov 2017 01:47:39 GMT

An example is, I sell for a cosmetics company. I buy my products from them at my wholesale discounted rate. However, they charge me tax on the full retail price. So if I want to cut a customer a break and only charge them what I pay for a product. I wanted to also charge them the tax on the full price because that's what I paid.

Re: Do I apply sales tax to the original price or the discounted price?

RHatch — Sat, 18 Nov 2017 22:37:50 GMT

I have never heard of someone paying sales tax on a suggested retail price, and as a reseller, you shouldn't be paying sales tax. Sounds like a red flag to me.

The only way to do this then is to not use the tax option in Square and to add an item labeled tax with no price. Then you will have to figure it yourself.

I still think this is wrong in so many ways. I would seek legal and accounting advice on this.

Re: Do I apply sales tax to the original price or the discounted price?

pamvosh — Sat, 18 Nov 2017 22:38:16 GMT

When I purchase product I have to pay sales tax on the retail value before my discount. I think i should be able to recoup that tax when i sell product. So I pay tax on say $25 but when i sell it with a discount I cant recoup what i paid in tax thru Square.

Re: Do I apply sales tax to the original price or the discounted price?

Helen — Sat, 18 Nov 2017 22:41:15 GMT

@pamvosh I recommend speaking to a tax expert or accounting professional about this!

Re: Do I apply sales tax to the original price or the discounted price?

VanKalkerFarms — Sun, 19 Nov 2017 03:25:11 GMT

I'm assuming these are direct marketing or home business like Avon etc. In these cases, if you are buying stock items for your business and not orders are taken at a home party then they do charge you sales tax based on full retail price.

For example, you buy a lipstick from Avon that retails for $10 but your discount is 30% you pay $7 and $.75 in sales tax (if you have 7.5% sales tax in your state). They don't know you aren't using these yourself and it is your responsibility to charge sales tax on items you sell out of your own inventory.

I don't think there is a way to sell an item for less and charge full price sales tax in Square. ThePoretically, depending on the state it matters for Sales tax if you are giving a coupon, manufactures coupon, discount, sale price. plus that will get into tricky with your customer questioning you ripping them off.

Re: Do I apply sales tax to the original price or the discounted price?

MomE — Thu, 02 May 2019 01:04:00 GMT

I am in Arkansas. I sell Scentsy and I have the same problem. We offer half-price and free product credits for our hosts. However, Arkansas requires that the tax be based on the full retail price and not the discounted price. I wish Square would fix this and give us the option to charge it before the discounts are applied.

Re: Do I apply sales tax to the original price or the discounted price?

Bignose18 — Fri, 03 May 2019 21:39:05 GMT

I have the same problem but I am in California, the taxes should be on full price but it is applying the discount to the taxes, please help

Re: Do I apply sales tax to the original price or the discounted price?

isabelle — Fri, 08 Jul 2022 15:06:51 GMT

Hello all! 🌟

‘Apply discounts after tax’ allows a seller to configure tax on things like manufacturer discounts, instant rebates, and Groupon offers. When a post-tax discount is applied, the item being discounted will still be taxed at the original price instead of the discounted price.

Sellers can configure discounts to apply post tax from Dashboard or Point of Sale.

[Updated by Moderator on July 8th, 2022]