thread Re: Sales Tax Q&A: How can we improve sales tax settings? in Archived Discussions (Read Only)

Sales Tax Q&A: How can we improve sales tax settings?

Tom — Mon, 15 Jul 2024 20:46:40 GMT

On November 10th, 2021 we hosted a Q&A with our Commerce Platform team which focused on sales tax settings.

The Commerce Platform team manages the sales tax product experience: everything from configuring tax settings in the online Square Dashboard to applying taxes to a sale, reporting, and filing.

One of the main goals of this event from our side was to ensure you're getting the most out of your tax settings and identify where Square can improve. We can't share out specific details on our product roadmaps, though we will certainly make sure all of the replies that came through on this post are considered as we iterate. Thank you to everyone who participated!

Re: Sales Tax Q&A: How can we improve sales taxes settings?

CactusQuilter — Thu, 04 Nov 2021 18:53:37 GMT

It would be nice to have the option to delete or inactivate a sales tax rate. We occasionally do events outside our normal location and have to add the sales tax for that location, but would like to be able to inactivate it so it doesn't keep getting added to new items that we add to inventory. We have to edit every single item now or it charges all of the rates.

Re: Sales Tax Q&A: How can we improve sales tax settings?

HC_Charlie — Thu, 04 Nov 2021 19:18:32 GMT

Great questions, thanks @Tom. My retail store collects state sales tax, so I use Square to assign the tax at the item level; certain items in my state are taxed while other items are not. So when I add an item into my inventory, I can check the box on/off to apply that state sales tax I have setup within my dashboard.

Everything works great with this one exception...some days my tax collected may be a cent off, either too much or not enough. I think this must be a rounding issue. Here's where I see the difference:

I use Quickbooks Desktop and pretty much manually keep track of daily sales and tax receipts. I use the daily report out of Square and write into a ledger I keep >>>

which in turn I use to input data into a daily sales receipt within Quickbooks. It's there I'll see the total at the bottom either be a .01 plus or minus (where this should end up being zeroed out).

It's not a big issue, I'll add an "adjustment" transaction into the daily sales here so it ends up correct.

Re: Sales Tax Q&A: How can we improve sales tax settings?

Thevioletfox — Thu, 04 Nov 2021 19:41:26 GMT

The one thing I absolutely hate is that the sales tax settings in Square Online don't seem to sync with Square. Here's what I mean - I created 10 new items in Square Online and sales tax is setup to automatically be turned on for all of those items (for sales in my state). Now, I go to an event and have my Square Reader with me. When I try to sell one of those 10 items, no sales tax is applied! I have to remember to go into the Square app, go into Settings, go into Edit Tax, then Applicable Items, and click "Tax All". And I have to remember to do that EVERY TIME I ADD NEW ITEMS. I run a bookstore so we often add new items on a daily basis. If Sales Tax is being applied on Square Online, it should automatically be setup the same way on the Square app.

Re: Sales Tax Q&A: How can we improve sales tax settings?

LuckyCat — Thu, 04 Nov 2021 20:43:05 GMT

Would love the ability to change the tax rate. We have a set 6.5% rate for retail sales. But our booth rent commercial rent rate is 6.2%. Would like to be able to change on invoices. Thank you.

Re: Sales Tax Q&A: How can we improve sales tax settings?

skiibum — Thu, 04 Nov 2021 21:15:41 GMT

My building materials business sells Retail w/ sales tax and Resale to licensed installers/ trades professionals with a State issued Resellers Permit.

I would like a place to select Resale rather then just turning the tax off for the transaction, as we are required to keep records of Resale sales. Would be even better if we could have Reseller company profiles with the permit# on file so when they purchase the tax is automatically set to Resale.

Re: Sales Tax Q&A: How can we improve sales tax settings?

JK_Fiber_Art — Thu, 04 Nov 2021 21:42:09 GMT

I guess we have to thank our elected state leaders and elected federal government officials (yep the politicians ) for causing all the tax confusion - it's clear that many of the decision makers are not small business owners and sell online, else the various current laws and policies for each individual state would not exist. What we need now is a national standard method of properly charging taxes and perhaps a national database that can automatically calculate the rates and an automated system to ensure that the due tax is funneled to it's rightful recipient - good luck with that happening. There are some 3rd party services that for a fee can do some of this for you but, for the small mom and pop shops, it's a huge cost and you're going to need a programmer to connect the interfaces. We've tried setting up tables based on Zip Codes however, this was a challenge just for one state let alone the rest of the country. Then there was the challenge of how to report the tax to individual location it was due - another issue to consider. Everyone wants their tax share but, no one seems to have the solution that works for the little guy. For us small businesses, all we're looking for is a behind the scenes solution - we don't need to how a system works other than it just works. Just my thoughts of course !!

Re: Sales Tax Q&A: How can we improve sales tax settings?

SparkleandSpill — Thu, 04 Nov 2021 22:31:30 GMT

A way to set a price that we want an item to be AFTER sales tax is applied would be nice. We keep our items at the same price online as we do at shows, and we include the tax in our prices at shows to avoid having to give change other quarters.

Re: Sales Tax Q&A: How can we improve sales tax settings?

calebsavage — Thu, 04 Nov 2021 23:38:58 GMT

A couple of critical issues with Square taxes:

- The way Square rounds money doesn't line up with the way that tax authorities or accounting software do. This has been discussed at length on these forums. Square uses the "round half even" method, which for a typical seller will under-collect sales tax when dealing with fractions of cents

-The Square Terminal API doesn't allow transactions to have sales tax as a separate line item. This is important for sellers with third-party integrations.

Re: Sales Tax Q&A: How can we improve sales tax settings?

florencews — Thu, 04 Nov 2021 23:58:32 GMT

This is timely, I was just going to the forum to post a sales tax question. We have just one location but will be participating in a multi-day holiday show in a different county. We need to set up a location for the show, and the sales tax will be different than in our home county (both are in Georgia). I see we can do this with separate inventories, but we will simply be drawing from the inventory of our main store and charging sales tax for the other county. Is there an easy way?

Re: Sales Tax Q&A: How can we improve sales tax settings?

baretattoo — Fri, 05 Nov 2021 00:29:07 GMT

I run a tattoo shop in NJ and my services require sales tax. I have recently been informed that sales tax is also required on deposits as well. currently, sales tax is not able to be added to deposits, will this change?

Re: Sales Tax Q&A: How can we improve sales tax settings?

BDaulton — Fri, 05 Nov 2021 02:35:49 GMT

My state does not charge sales tax on food items so it would be great if my retail store can exempt all items from the "food" category.

Re: Sales Tax Q&A: How can we improve sales tax settings?

SKancianic — Fri, 05 Nov 2021 14:12:40 GMT

We dealt with this same issue. Under Account & Settings >business > Sales Tax, we set up 2 taxes, one for "Virginia Sales Tax", the Other, "Sales Tax - Included in Price". in the latter, make sure you turn on "Include Tax in Item Price"

Next, select the specific Items you want this tax rule to apply to. This took me a while to figure out, but it works well.

We're a photography company, and oftentimes people are ordering school photos or ymca / little league sports photos, and we want to round out the final amount due on the form or sign. We still pay the tax, but it makes transactions easier.

Re: Sales Tax Q&A: How can we improve sales tax settings?

SKancianic — Fri, 05 Nov 2021 14:14:31 GMT

Similar issue in our area of Virginia. Sales Tax is 5.3% not a friendly number.

Re: Sales Tax Q&A: How can we improve sales tax settings?

TheModernDeer — Fri, 05 Nov 2021 15:46:46 GMT

I wish the sales tax collected went into a separate account in square so that it didn't just all go into your balance.

Re: Sales Tax Q&A: How can we improve sales tax settings?

page158 — Fri, 05 Nov 2021 15:54:53 GMT

We sell books, gifts, etc which are all taxed at one rate. We also sell beer and wine which have the original rate plus an additional 1% that gets reported and paid to a different state entity. Fairly straightforward to set up in Square, but every time a new item is created via the Items screen, the beer/wine tax is active and it shouldn't be. Conversely if a new item is created via the API, no tax is set as active (as some others have already mentioned here). It would be helpful if each tax could be set as "add by default" (regardless how the item is created) or "add manually".

I'd also like to confirm the rounding issue that others have mentioned.

Re: Sales Tax Q&A: How can we improve sales tax settings?

JustMikes — Fri, 05 Nov 2021 16:09:29 GMT

I own a restaurant and use Square for Restaurants. In the store system I have a tax rate set up My state sales tax and a tax rate for a non cash convenience fee that we remove if the customer pays with cash. My biggest issue with the Sales tax system is that with the online ordering you have to set the sales tax up there differently and does not sync with the POS. The sales tax rates for the online ordering should mimic what is in the POS.

On another note, if Square would allow for different pricing with online orders without creating a whole new menu this would also fix that problem.

Re: Sales Tax Q&A: How can we improve sales tax settings?

RB6 — Fri, 05 Nov 2021 17:19:25 GMT

All my clients are sales exempt. How do I turn off the sales tax that is automatically charged?

Re: Sales Tax Q&A: How can we improve sales tax settings?

weredoughcookie — Fri, 05 Nov 2021 17:37:53 GMT

I'm not sure but having easier settings for tax rules would help.

I own and run a bakery and cookie dough cafe in Flint, MI.

In Michigan baked items are not taxed, but my cookie dough, ice cream, and non baked items are. And when adding new items I constantly forget to make sure the tax is off of baked items.

Maybe have tax rates be able to be applied to categories?

Re: Sales Tax Q&A: How can we improve sales tax settings?

mythicrunning — Fri, 05 Nov 2021 19:23:35 GMT

My biggest Sales Tax nightmare is our three Sales Tax Holidays in which certain items up to a certain amount are tax free for a limited number of days. For instance, during the Back to School Sales Tax Holiday, shoes $60 or less are tax free. We have a few pairs of shoes that meet the criteria; those are easy enough to go in a change since they all tend to fall under a specific category. Where we really struggle is with variations of items within the category that qualify as tax free. The State also allows for tax-free up to a certain dollar amount on particular items. For example, the first $300 of kayaks and canoes are tax free, but the remaining amount is taxable (i.e. a $600 kayak; the first $300 is tax-free but the remaining $300 is taxable). It's an accounting/bookkeeping nightmare.