You absolutely can have different taxes for each item, just takes a few steps to set up.
First, you will need to set up two separate taxes; one with tax added to the price and one with tax included in price. You can create a tax either right from your Square Dashboard or right from your Square Register App.
Then, apply the correct tax to each item (again you can do this either in app or on your Square Dashboard). Once you have applied the taxes to each item, your tax settings will automatically apply to every sale!
You can also check out our conditional sales tax settings.
