How to set separate - itemized - sales tax rates per item in my Square Online site?

[mtnoven]

The title of this post has been edited from the original: How to set separate sales tax rates per item in my Square Online site?

We are a bakery that sells different categories of items that our state (CO) taxes differently.

For example, bread that is sold packaged to be eaten at home is exempt from state retail sales tax whereas a ready to eat pizza includes the state retail sales tax.

This results in us having different items that we need to tax at different rates.

In the Square Register, this is easy enough to do. In the Square Online site, however, I don't see any way to set tax rates by the item - only by the location.

How can this be resolved? Thank you!

[Valentina · Accepted solution]

You can now use itemized tax rates for pickup and delivery orders in your online Square Dashboard!

Thanks for popping in here to let this thread know that feature has been rolled out, @Darla_! I wanted to jump in to provide a bit of detail for anyone who hasn't had a chance to check out the change. To get started, you'll head to your Square Online Overview page > Settings > Taxes and look for the Tax rates & calculations section:

Here, you'll want to toggle on one or both of options, as shown above - depending on how you'd like to use the itemized taxes. Learn more about itemized taxes by checking out this article from our Support Center!

Note: Shipping orders will still use the tax rates set in the Square Online Overview page settings.

[AspireP]

I am having a lot of trouble getting to this page. I think my problem would be solved if I could. From the online overview, I go to settings>Sales Taxes (there is no Taxes page). Then it takes me to the Sales Tax page, with Order and Item levels tax rates. If I could get to he pages you listed I think I'd be fine. Please help! 

[clarajanenash]

Why would you create the functionality to charge the correct sales tax only for pickup and delivery? Is there some magical situation where a customer chooses shipping and taxes suddenly don't need to be handled correctly? 

What is the thought process behind giving enough functionality to have 2/3's of sales taxed correctly while leaving 1/3 of sales to be taxed incorrectly?! 

Taxes are incredibly important. Complying with local laws is incredibly important. Square is actively blocking their customers from being able to set their sales taxes up correctly for 100% of sales.

This needs to have been fixed years ago.

[rochesterfringe]

NY charges a 4% tax rate but different counties within the state charge tax atop that. In some counties, apparel is taxed differently than other items. 

Square automatically calculates tax at checkout in our online store but doesn't recognize which items are apparel versus non-apparel, so everything is taxed at the same (sometimes incorrect) rate. 

Is there a way to differentiate types of items in Square so that different tax rates are applied accordingly?

[ashc]

Heya @rochesterfringe,

I moved your post to an existing thread where another seller asked the same question.

Check out @Valentina's post above in the Best Answer for the most recent update.

[rochesterfringe]

Hi @ashc, thanks for the reply! I am referring to tax on orders that we ship (sorry to not specify). We sell apparel (4% county tax + 0% state tax, 4% total) and novelty items like mugs (4% county tax + 4% state tax, 8% total), but Square's auto-calculation seems to default to 8% on orders that we ship within our county.

[localartisancol]

We are a retail store.  99.5% of the items we sell have a normal sales tax.  However, we happen to sell a handful of food items that get taxed at a different "food sales tax" rate.

Currently, our Square setup by default automatically applies both taxes to new categories entered into Square.  Therefore, it requires us to remember to uncheck the Food Sales Tax whenever we add new categories.  Unfortunately, we are a cooperative (co-op) so have dozens of artists adding their own new categories and items to Square daily and they frequently forget to uncheck the "food sales tax" item.  This causes items to get inaccurately double taxed when sold and causes us big headaches when trying to accurately payout the earnings to the cooperative members each month and report taxes correctly. I've tried looking into this and couldn't find a straightforward way to limit new categories by default to have just the regular sales tax.

I want our artists to only have to remember to manually change tax on the food items we carry, rather than having to remember to remove the food tax on 99.5% of categories added.  This is surprising to me that this functionality doesn't exist because lots of grocery stores, minimarkets, retail stores that sell drinks, etc. would have this issue as well.  So, my questions are:

1)  Is there a way to do this easily that I'm missing?  

2)  Could I set up a new Location for the food items since Locations can be set up for different taxes?  But have our checkout station pull items from both locations for the same transaction?  Would this work?  Would there be any tax reporting implications of this setup?

3)  Is there another creative way to accomplish what we need by reorganizing our items in the system?

4)  If the above won't work for our needs, can Square please either create a "default tax" option setting that gets used when creating new categories.  Or, can Square set up some "Tax Rules" that we can configure that are category based and not tied to checkout like the Restaurant Tax Rules?   

[localartisancol]

Well, I guess I have my answer -- no one has responded so there's obviously no way for us to handle this except having to manually unselect the food sales tax every time we set up new subcategory of items.  Bummer.  Square really needs to address this in their functionality.  It would help so many different businesses.

[AshleyK]

@localartisancol I'm really sorry to hear the frustration regarding the responses on here. We do our best to touch base with as many threads as possible, but it does take time. I also hear your frustration in dealing with taxes for different categories. This is still a really popular feature request that we are tracking in a separate thread. I've merged this thread into that so we can keep all the feedback in one place. 

You will likely be able to find workarounds that other sellers are using to address this. I do not recommend going the two locations route as you will not be able to pull inventory from both locations at once during checkout. Perhaps the best thing in your specific situation is to have one dedicated inventory manager that will input all items. This will limit the possibility for error as one person will be responsible for marking the food tax as enabled or disabled.

[RCBR]

I do wish that Square would have a set of taxes preselected based on the category you select, it would help when adding new items that all taxes weren't selected, but I'll take that rather than none selected, and have to pay the tax out of the item cost.

[timjmcg]

We are unable to sell alcohol online and losing lots of $ because of Square's inability to roll out customized taxation for online stores. Cmon guys this is mission critical and has been a major for over a year now. Please address this asap.

[RedLightRoaster]

They did make it possible for pickup and delivery orders.  But I don't think it is available for shipping orders yet.  

See a few comments above yours for the settings to turn on itemized taxes for pickup and delivery orders.

I hope this helps.  And hopefully they will add the same itemized tax ability to shipping orders SOON!

[tinybreadbox]

We are a bakery that sells different categories of items that our state (VT) taxes differently.

For example, bread that is sold packaged to be eaten at home is exempt from state meals & rooms tax whereas a ready to eat individual serving size includes the state meals & rooms tax.

This results in us having different items that we need to tax at different rates.

In the Square Register, this is easy enough to do. In the Square Online site, however, I don't see any way to set tax rates by the item for self-serve ordering - only for pickup and delivery.

How can this be resolved? Thank you!

[Joe]

Hi there, @tinybreadbox 👋Thanks for taking the time to reach out to us here on the Seller Community!

I've gone ahead and merged your post into an existing thread of Sellers who were also looking for information regarding itemized/category tax customization for Square Online - this looks to be an outstanding Feature Request.

At this time, customizing taxes per item is only a feature available for in-store purchases and POS purchases, not the Square Online site. We're working to ensure that tax settings will be able to be synced across both POS and Square Online site settings in the future. In the meantime, there is not a way to create a custom tax, or a per-item tax within the Square Online site.

[FairTradeShop]

Hey, checking back into this problem for taxes on shipped orders.  You made a fix for delivery and pickup. PLEASE give us the same ability for shipped items!! Illinois collects the same tax based on it being shipped from our location, not on where it is being shipped.  I'm currently in a very difficult situation of not being about to properly handle the Illinois Tax Holiday from Aug 4 - 15. Only certain categories like clothing are at a 5% lower tax rate (not fully tax exempt) while the rest of our inventory is at its regular tax rate.  I have NO way of implementing this for my shipping order online! It's been years. Please give us the ability to set item level tax rates for shipping orders as well. PLEASE 🙏

[JJ_]

Hey there @FairTradeShop I suggest you reach out to our eCommerce team so they can help shine a light on your situation. I am sure you aren't the only Seller in this situation and most likely they will have a workaround or solution to set you up for success. You can give them a call at 855-700-6000 between 6 am - 6 pm Pacific Time Monday-Friday.