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When I add a discount other than free shipping which is set to not be taxable, the sales tax does not calculate correctly!
example:
invoice for 2 items for $5 each equaling $10 then 1 item for $1 all three items taxable at 10%. Add $4.50 shipping. Total comes to $16.60, where tax equals $1.10. I add a $5 discount for a free item and the tax turns into $.74 and the total is $11.24. It should be $.60 tax and total of $11.60. I’ve double checked all my setting for taxes and tried many different things to fix this. Please help.
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Hello @Maryadams, I can help explain this. Currently discounts are applied before the tax.
Since you have a $5.00 flat discount it will apply to all of the items in the sale including the shipping. The $11.24 you see is correct since your shipping item isn't taxed.
If you still have questions please let me know!
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How do I apply the discount and it calculate correctly?
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Hi @Maryadams, thanks for circling back. Are you looking to collect tax on the value of the $5.00 item, even though no funds are collected for it? If so, you may want to touch base with a tax advisor or professional on how to proceed.
If that doesn't clear things up, I'd suggest getting in touch with our CS Team directly—they'll be able to take a deeper dive into the specific invoice and make sure all off your settings are properly configured.
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Thanks for replaying. I guess I will have to get in touch with them because I’m not trying to collect tax on the discounted item.
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