How Do Sales Taxes Work Between States?

[wiseanttech_m]

Hi there! Quick question: If a seller has taxes enabled for Connecticut but moves to another state, like Texas, over the weekend and uses their Square chip reader for payments, will the taxes still apply as Connecticut taxes, or will no taxes be charged due to the location change?

[Candlestore]

@wiseanttech_m ;

This would all depend how the Business has their Taxes setup in Square.  When you move locations like that you would need to have another States taxes filled in so Square knows what rate to charge at your POS.  In your Business Settings for Tax rates you can add different Tax Rates and then apply them to the items your selling in that state.  This would be on you to manually change them and set them up.  The easiest way to do this would be Create the Tax for Texas, in your case along with the Tax for Connecticut.  Then Export your Catalog.  When You leave or will no longer be selling in Connecticut, in your csv file Change the Tax rate for Connecticut from Y to N and Turn the Tax rate you created for Texas from N to Y for all your items.  Then repeat in reverse when you go back to Connecticut.  Otherwise you need to do this in your Square items Individually I believe.  The other alternative is to create another Location Called Texas, but any upgraded plans with Square that charge by Location, you would be billed for each Location.  

Square for the POS (chip reader) bases taxes on the Information you apply in your Settings and when created your account and does not change taxes as you do sales indifferent tax states automatically.  There might be other ways to do this that I am unaware of.

[Summer2024 · Accepted solution]

Hi @wiseanttech_m ! Thanks for the question here & thank you @Candlestore for your great input. 

My biggest piece of advice is to reach out to a tax consultant. They are the experts here and we are very limited on what kind of tax advice we give. I know I would hate to steer you in the wrong direction! 

[rtfulk]

We work in 6 different states. First you will need a tax number for each state you work in. Some states will allow you to report your sales yearly, if you work in that state occasionally. some states make you log in monthly or quarterly even if you have zero sales, you still have to log in and put 0.00 sales.

After you do that you will need to log into Account & settings and setup the taxes for each state you plan on working. When you setup the taxes just remember some cities add an extra percentage on top of the state sales tax, so you will need to add into your taxes.

Below is how we have our taxes setup for our Square POS, we just log in and turn on/ off which state we are currently working in.