The way you set taxes up in Retail POS depends on whether your in-store prices are displayed inclusive of tax, or exclusive. Tax inclusive means tax is included in the displayed retail price of the item. Tax exclusive means tax is added on top of the retail price at the time of the sale.
Stores in the USA and Canada are tax-exclusive. New Zealand, Australian, and UK stores are tax-inclusive.
Tax-inclusive stores
Taxes in Retail POS can be set at a number of different levels:
- A default tax for your entire store, made up of one or more tax types.
- A tax rate on an individual product for all outlets. This may be no tax or any of the taxes you've created for your store.
Tax types can either be added from the Dashboard Getting Started wizard, or from the Sales Taxes Setup page.
Creating an individual sales tax
To create a new tax rate:
- Navigate to Setup > Sales taxes.
- Click Add sales tax.
- Enter the Tax name and Tax rate (%).
- Click Add sales tax.
Complete this for each individual tax rate in your region.
Your store will also have a No-tax 0% rate set. You cannot remove this.
For retailers integrated with Xero, remember to map your taxes in Xero settings.
Tax-exclusive stores
A tax-exclusive retailer is a retailer that displays prices for products without their tax component. If your store is in the USA or Canada, this will be you.
Your taxes in Retail POS can be set at two levels:
- A default tax rate for each outlet. This may be a single tax rate (including no tax), or a grouped tax made up of more than one tax type.
- A tax rate on an individual product for all outlets. This may be no tax, one tax, or a grouped tax made up of more than one tax type. This tax rate overrides the outlet and store defaults.
Retail POS's tax model does not support manufacturer-issued coupons, which require tax to be calculated on the before-coupon-discount-applied price. Tax in Retail POS is calculated after the discount is applied.
Your taxes will need to be created before you apply them.
Creating an individual sales tax
To create a new tax rate:
- Navigate to Setup > Sales taxes.
- Click Add sales tax.
- Enter the Tax name and Tax rate (%).
- Click Add sales tax.
Complete this for each individual tax rate in your region.
Your store will also have a no-tax 0% rate set. You cannot remove this.
Grouping tax rates together
Once you have created your individual sales taxes, you can group them to be applied to your store or products.
Remember, these will be itemized on your receipts.
To create a group tax:
- Click on the Combine taxes into a group button.
- Name your group tax.
- Select the individual sales taxes from the drop-down.
- If more than two taxes are required, click Add another sales tax to access more drop-down boxes.
- Click Add tax group to finish.
Complete this for all the tax groups you need to create.
Apply your tax rates
Once you've set up all your required tax rates, you need to apply them to your store or products.
On the Sales tax page, for each outlet listed in the Default outlet taxes section, you will need to set the default tax rate for sales and products for that outlet.
Click the Edit outlet link next to each outlet to set the tax rate.
Important: The default tax will not apply to existing products. If you've already added products to your store, you'll need to update these.
For retailers integrated with Xero, remember to map your taxes in Xero settings.
Threshold taxes
Certain US states use a threshold tax system. In this tax system, products are taxed at a particular rate based on the total retail price of the product.
Retail POS allows you to set up and apply threshold taxes based on certain price thresholds being met at the time of sale. Threshold taxes are only available to retailers with tax-exclusive stores.
For more information on setting up threshold taxes, refer to our Setting up threshold taxes guide.