Charging sales tax before discounts are applied

[homeprogreen]

Does anyone know of a way to make square figure the sales tax amount before any discounts are applied to the sale? In California the customers owe the sales tax on the full price of the items before discounts. So since square figures the sales tax AFTER the discounts are applied I always end up oweing a couple of hundred dollars each quarter to the state board of equalization out of my pocket

[RHatch]

I would talk to a tax professional to verify this but it looks to me when reading the CA tax website.  That it is just like most other states.  Discounts you offer allow the tax to be figured on the subtotal after discount.  Only coupons that the manufacturer will pay you back on, the sale is taxed on the gross.

If you are taking these types of Manufacture coupons then yes you will have to pay more tax.  At this time Square like most POS systems will only figure the tax on the subtotal. 

[homeprogreen]

@RHatch I have talked directly to the California tax board and sales tax is definitely figured on gross sales before discounts. That is why when we go get an upgraded cell phone at a discount we pay the tax on the full price of the phone. Should be illegal to charge tax on money that I don’t get to collect but they said that the way it’s written allows me to collect the tax from the customers. It’s just that Square isn’t set to do it

[llangberg]

I read on thr CDTFA website that actually in general, if you're discouting a sale directly, sales tax is only on the amount AFTER the discount.  Cell phones sold with an airtine contract are an exception.  See Regulation 1671.1, Sectiion (b) DISCOUNTS, Item (4) RETAILER COUPONS.  it's on https://www.cdtfa.ca.gov

again under Regulation 1671.1.  You can find it with the search feature.

[kiksngigls]

I carry inventory in my POS and have paid sales tax on that inventory.  How can sales tax be added to sales regardless of there being any discounts applied?

[JustinC · Accepted solution]

Hey @kiksngigls

There's no way around sales tax being calculated after the discount applied. Merged you to a more relevant thread.