Threshold taxes are only available to retailers with tax-exclusive stores.

Certain American 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.

Creating a new sales tax

First, you need to create a new sales tax rate that will act as the threshold tax:

1. To create a new tax rate, navigate to Setup > Sales taxes and click on Add sales tax.

   

2. Enter the Tax name and the Tax rate (percentage).

   

3. Check the Add exemption for clothing and footwear box.

4. In the Threshold ($) field, enter the amount at which point the exempted products will be taxed.

   For example, a product with the tax code for clothing and footwear will only be eligible for Massachusetts Apparel & Fabric Goods tax if the retail price exceeds $175, and will only be taxed on the amount that exceeds that threshold.

   

5. Under If the product price exceeds the threshold, charge tax on dropdown, select whether the threshold tax will tax The entire product price or Only the amount exceeded the threshold.

   

6. (Optional) If you have products and outlets using another tax rate and want to update these items to the new tax rate, check the Change the tax used by outlets and products to this new Sales Tax, instead of an existing Sales Tax box.

   

7. From the dropdown menu, click the tax rate you will be replacing.

   For example, any products and outlets currently using Cali Tax (8%) will be updated to MA Tax (6.25%).

8. Click Add Sales Tax.

Assigning a tax category to products

After the threshold tax has been created, you'll need to assign the default Clothing and Footwear tax code to product(s) in your store for any products eligible for threshold taxation.

1. Navigate to Catalog > Products.
2. Filter for the products you need to edit and click Edit product.
3. Scroll to the Tax section and click a tax category from the dropdown.

   

4. Click Save.

Updating tax categories in bulk using the Retail Imports Team

If you need to make bulk changes after creating sales and threshold taxes and assigning a tax category to products, you can submit a request to the Retail Imports Team.

First, export your product list:

1. Navigate to Catalog > Products.
2. Apply any necessary filters to the products list and click Search.
3. Click Export List on the right.
4. Click a download format (XLSX or CSV) from the dropdown list.
5. If the download doesn't begin automatically, Click to start the download.

Once you've downloaded the file, edit the spreadsheet file. You'll submit this to the Retail Imports Team to apply the tax category updates to your catalog:

1. Rename the column id to product_id.
2. Add a new column to the right of the product_id column and name it tax_category.

3. To remove the tax category, write remove in the tax_category field.

   Currently, Retail POS (X-Series) only supports the default tax category Clothing and Footwear. Set this by writing clothing in the tax_category field.

4. Delete all columns except for product_id and tax_category.
5. Save your file as XLSX (preferred) or CSV.
6. Verify your file before submitting to avoid issues that may cause the data import to fail.
   1. Remove special characters, like™,☺,©, etc.
   2. Erase cells with N/A so the field is blank.
   3. Format scientific numbers (4.001E+11) as regular integers (40010000000).
   4. Format all cells, including cells with numbers, as plain text. In Google Sheets, click Format > Number > Plain text.
7. Submit your file to the Retail Imports Team.