Sales Tax Brackets

[Lindsaym1010]

Hello, I am in Florida. I got a call from the Revenue office. They stated that where I am located I should you a sales tax bracket not a straight percentage. This means that the cents is also taxed on a sale. She gave me the example of $1.24 she said when I ring it up on my POS the taxes that should be charged on .09 cents. When I did this (I have my sales tax set at 6.5% as per my state and county surtax) the taxes came to .08 cents. Now it is only 1 cent different. She said that it being off a few cents isnt a great big deal but over time it could cause a lot of issues. So my question, is there a way on the square system to input a bracket tax rate vs just a straight percentage. Help? And yes I will reach out to a tax proffesional just to make sure everything is perfectly okay but wanted to know if anyone else has experienced this... or is in my area (central fl) and knows how to set up correctly 

Thank you 

[AshleyK]

Hey @Lindsaym1010 I'm really sorry to hear the frustration regarding your taxes. You may want to add another decimal for your current tax percentage to help with banker's rounding. For example (and this is not the exact recommended percentage), you can add 6.59% as your tax rate instead of 6.5% to try and help get that $0.01 that's missing from some sales. 

I would check with your local tax rates to see if you can get a more accurate percentage.

[CottageOven]

Hello. I'm also in Florida and had given a detailed description of this issue to one of Square's telephone-support representatives.

So far, Square has not implemented any kind of bracket system for sales tax, but (at least in Florida) we can stop worrying about this now, since Florida has recently changed to a percentage/rounding system.

Here's the text of a recent item on the Florida Department of Revenue website bulletin board:

As a result of recent legislation, the “bracket system” for calculating sales tax and discretionary sales surtax in the State of Florida is replaced by a rounding algorithm. Effective July 1, 2021, businesses collecting and remitting sales tax and discretionary sales surtax must use a rounding algorithm that: 1) carries the tax computation to the third decimal place; and 2) always rounds up to the next whole cent when the third decimal place is greater than 4.

The bulletin also gave a link to a PDF file with further details.

Although this does not provide any answers to other states that may still be using a bracket system, at least we now know that it is no longer an issue in the state of Florida.