Item Tax For Online Items also sold in-store on POS

[ScottSecondLove]

The title of this thread has been edited by a Square Moderator from the original: "Item Tax For Online Items that I also sell in store on POS"

Hi There!

I am setting up my square online shop to an existing square POS we use for our Cafe. For the cafe I had to manually configure each item to have the correct city/state tax rate as we have a Nexus in the state with our business located here. However, for online sales we plan to use the automatic tax calculator based on shipping address since we only have a Nexus in the state we operate in and must still charge taxes for orders shipped inside this state but not for shipping elsewhere. When I moved the items to the online store they still charge the item tax rate we set which meant we have to remove the item tax rate so it'll automatically charge for the customer address. However, this means my POS no longer charges taxes when we ring up customer physically. Is there a way to separate the item tax configuration by sales channel or will I literally have to duplicate my entire inventory so I can item-tax configure each SKU for retail and have it disabled for the items in our web store? Seems like a big hassle if that's the case!

Thanks!!

[_Violet · Accepted solution]

Hi @ScottSecondLove - I see this is your first post. Welcome to the Square Community!

I reached out to our Square Online Team for more insight and this is what they let me know:

Square Online shipping orders automatically collects the Sales Tax rate based on the Square Seller's tax registration state. Shipping orders will not apply the Seller's custom in-person Sales Tax rates that they've configured in their sales tax settings, so they don't have to worry about that.

When a customer placing a shipping order enters, for example, a Washington shipping address, the sales tax calculator will automatically generate a sales tax rate based on the Washington state Sales Tax rate + the Local Sales Tax rate, depending on the zip code.

I hope this information is helpful but please do let me know if you have any additional questions 🙂

[ScottSecondLove]

Thank you, so what you’re saying is that I should keep a custom tax rate on the item for our in person location as square won’t auto calculate sales tax based on location for physical transactions (sold in store not shipped online). If that’s the case then I should assume that if I have a location custom tax on the item and that item is sold on square online for delivery it will “override” that custom tax with the delivery location tax so long as I have that state listed in my settings?

[_Violet]

Hi again, @ScottSecondLove 👋 Thank you for your patience here.

I followed up with the Square Online Team again and this is what they let me know:

For Square Online orders, shipping is the only fulfillment method that sales tax collection cannot be customized. Unlike Square Online pickup and delivery orders where you can choose to "automatically collect sales tax" (automatically collect sales tax based on your location state) or "Use in person sales taxes" (collect sales tax based on the custom sales tax rates created by you in you sales tax settings), shipping only allows the option of collecting sales tax on Square Online orders or not collecting sales tax on Square Online orders. So, if you chose to collect sales taxes on Square Online shipping orders, then by default the sales tax collected will be based on the customer's shipping address state and zip code entered at checkout as long as the seller has a tax registration for that state set up in their sales tax settings.

I hope this makes sense! Please let me know if you have any further questions 🙂

[ScottSecondLove]

Thank you Violet, so just to confirm, the item specific tax we can continue to set for our retail location (instead of selecting 'no tax') and the online store will automatically override that tax amount with the shipping location?

Thanks!