7 years later and no fix? GIFT CARDS and SALES TAX

[PicKFishPets]

When you sell an item as a gift card you sell it non-taxable as the tax is added when it is redeemed to the actual purchase. However when you go to do sales tax they ask you for Gross sales. Because of the setup in square the Gross sales includes non-taxable sales of gift cards and then when a purchase is made with the gift card and the user pays sales tax the state is getting a double dip even though you only took it in once. 
There needs to be a line for gross sales not including non-taxable sales. My tax collected line never matches what the state takes because of this and I end up paying twice 

Going back this is an issue here since 2017, is there a new change yet?

Since i get one constant reply and then the thread is locked, I AM NOT BUYING SQUARE GIFT CARDS. I am not paying 2.5% load fee on top of the cost of the card itself, it makes no sense esp since a lot of my gift card purchases are lower value. I have my own gift cards, I just want the register to display gross sales without non-taxable sales. It will only give me gross sales including non-taxable sales which throws off sales tax numbers and leads to me paying sales tax twice!

[MayaP · Accepted solution]

Hello @PicKFishPets,

We understand your concern regarding the calculation of gross sales and the inclusion of non-taxable sales of gift cards. It's frustrating to face this issue, especially when it impacts your tax calculations and leads to potential overpayment.

Unfortunately, as of now, there hasn't been an update to address this specific issue. Your feedback is valuable, and we are continuously working to improve our systems based on feedback like this. In the meantime, here are a few suggestions to help manage this situation:

1. Manual Adjustment: When preparing your sales tax report, manually subtract the non-taxable gift card sales from your gross sales to get an accurate figure for taxable sales.
2. Custom Reports: Use custom reports within Square to filter out non-taxable sales before calculating your sales tax.
3. Third-Party Solutions: Consider using third-party accounting software that integrates with Square to provide more detailed and customizable sales and tax reports.

We appreciate your patience and understanding as we work towards a resolution. If you have any further questions or need assistance with reporting, please don't hesitate to reach out to our support team.

[PicKFishPets]

So after 7 years of this being an issue, Square has chosen to not help with a work around?
Is this so we feel more inclined to purchase your gift cards?
This seems like an easy fix to put an extra line in the reports for Gross Sales minus Non-Taxable Sales amount.

[ryanwanner]

Hello @PicKFishPets !

If you're not using Square's Gift Cards, there isn't a real easy way to keep track of things in the Square ecosystem. For the most accurate reporting you'll have to go to your accounting software. Here's how I did it when I was running with Gift Certificates:

• The Gift Certificate item was set up as a nontaxed item. (Sounds like you've already done this one)
• Whenever a Gift Certificate is sold, ring it as you usually do.
• When you enter your daily sales in your accounting software--I use Quickbooks--manually subtract the dollar amount of the certificate: e.g. if you sold a total of $100 in sales but there was a $25 certificate sold, you'd enter your gross sales in QB as $75.
• On the daily sales report, you'll also have a Gift Certificate item. This is a liability account on your books. It should show up similar to how any short term loans show up on your PnL statement.
• When the certificate comes back in, ring up the sale as usual.
• In your accounting software, you will negate the Gift Certificate liability. This is how you track the transaction.

Yeah, it's a kludge. It was this way long before Square had gift cards so I don't believe it's solely so we buy the cards. Personally, I prefer to look at QB for all my main sales data anyways: in that software I can see a fuller picture since it shows me all the loan payments (in and out of Square), purchases, and overall cash flow. It also helps with these random one-offs that sprout up occasionally. That's not something Square is designed to do.