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Is there a way to create a post-tax discount?

We're looking to accept a credit voucher from a 3rd party, but want the person redeeming the voucher to pay tax on the full amount.

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Re: Is there a way to create a post-tax discount?

Hello! While I can definitely understand how this feature could be useful in a number of scenarios, our discounts are currently only able to be applied before taxes. 

 

I'll be sure to share your feedback with our Product team!

 

PS) If my answer solved your problem, would you mind marking it as "Best Answer"? That'll help the rest of the community find what they're looking for. If not, just write back, and I'll continue to help. Thanks!

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I have not found any way to control whether the tax is calculated before a discount or after.  Has anyone found a way to do this?  I want my tax calulated on the original amount instead of the discounted price.  

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Super Seller Alumni

What state are you in?  Tax is figured after discounts unless you as a retailer are going to be reimbursed for the discount amount by the manufacturer.

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This reply was created from merging an existing thread: “Can the sales tax settings be set to calculate tax before a discount? I don't see that option.”

 

@DGrove I've moved your post here so that we can track interest the ability to calculate tax before a discount is applied. If we have an updates we'll let you know in this thread.

️ Helen
Seller Community Manager

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I am also needing a discount after tax option.  It would be nice to just be able to choose whether a tax or shipping charge should be applied to a discount.  Now, we can choose to turn off a tax calculation on items but not on discounts.  I need to refund a $10 fee to many of my customers during a sale, but I only want the $10 refunded, not the $10 plus the associated tax and shipping.

 

Thank you.

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Thanks for sharing your interest and how you'd like to use this @jschersand. I'll share your post with the relevant teams.

️ Helen
Seller Community Manager

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Thank you for letting the team know there is another person who needs the ability to do a post-tax discount. 

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This reply was created from merging an existing thread: How can you apply a discount after taxes?

 

There are times when we need to apply a discount on some transactions AFTER taxes are calculated.  Sort of like a gift card, but we aren't "selling" gift cards.

 

For example, if someone buys $100 worth of items, and taxes are $8, then the total is $108.  But then we need to be able to apply a $20 discount so we only charge the credit card $88.

 

How can this be done?

 

We don't need to "record" the $20 if we don't have to (if we have to that's fine, but we don't care).

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Out of curiosity, why would you want to apply the discout after taxes?  If you apply the discout before taxes, you would be responsible to pay less sales tax.

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I want to know this too. We work a state fair and have a coupon for kids. We want to subtract the coupon after we have full value and tax value. 

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I'm still a little curious on this.  What would be the benefit of taking the coupon out after taxes?  If you take it out before taxes, you're saving the customer money, and that's less sales tax that you have to pay.  I guess I don't see the need to remove coupons (discounts) after taxes.  

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I pay sales tax when I buy my product from the vendor. I am taxed at my state sales tax rate on that product. 

If I charge sales tax first and then the discount, I am recouping the tax that I paid and still saving the customer money by giving them the discount. BTW...I don't charge for shipping as a service to my customers.

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Bare with me as I try to wrap my head around this.  So you are choosing to pay sales tax to your vendor, correct?  I've always known the product I sell to be tax exemptable when I purchase it from a vendor.  Otherwise you end up paying sales tax twice.  Once to your vendor for the product and then what you are required to pay in from your sale (unless you are selling to a tax exempt entity).  Now, I have known companies that elect to pay the sales tax on their resale items for a bigger write off, but that's a different story for a different day.  In my opinion it would be easier for you to request a tax exemption from your vendor.  Technically that would be the right way to do it.
I guess my next question would be, are you still paying the state the tax owed from your sale?

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@Wrightjmd @HugoSchmidt I went ahead and merged your post into this thread where we're tracking this request. Thank you for letting us know how this would benefit your business, that's really helpful as our Payments team works to make improvements. 

️ Helen
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This kindof goes with the question I have going right now. When I have taxable items and  non-taxable services rendered and a discount is applied , the discount is portionally applied across the whole transaction -  This is not what I am looking to do... I would like to be able to discount ONLY taxable items sales, not my services. I am going to tag you and cross post  @Helen.

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I need to be able to set up a non-taxed discount so we can account for some promotions we do with donations. We give them a paper certificate that works like a gift card (but it isn't an actual gift card). So if the certificate is for $100.00, I need the discount to work like a gift card in that it takes $100 off the balance due for the order, but doesn't affect sales tax for the order. Has anyone been able to handle something like this in Square? I don't want to process it as tender, because it is more like a discount on the order, not actual tender.

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Hello @jthorvaldson!

 

I've merged your post into this thread where we're tracking this feature request. At this time taxes are calculated after the discount is applied, so there isn't a way to process the sale without affecting the tax. One our our SuperSellers, @ACAcatering, shared a workaround in this thread too. I hope that helps in the meanitme! 

️ Helen
Seller Community Manager

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Hello,

I'd like to echo the need for a post-tax discount. We need to pay sales tax on the sale of our product even if we give it away (it's liquor so has specific rules). And we also need to pay sales tax on in-kind donations/giveaways which is quite a frequent occurence, so right now it is extremely manual and time-consuming to make sure our accounting software is calculating the correct tax liability. The current process is to ring it in in Square, then print out the receipt, void it and enter it manually into our accounting software. There has to be a better way....

 

Thanks,

James

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We've struggled with this too, and finally came up with a, not great, but acceptable solution.  When we want to discount post-tax, we'll do a Split Ticket payment and apply an Other payment type, which allows for a note to be entered.  When this "discount" is applied in this way, it comes off after sales tax and almost everyone is happy.  It's a little kludgy, but it works.

 

Here's the bottom of a recent receipt where a customer used an existing credit.  Her credit completely covered the total cost, so we didn't have to do the Split Ticket thing, but we still entered the discount as an Other receipt, and added a note so we know that no money was received:

 

Post-tax discount.jpg

This may not work well as-is if you're exporting your sales to a bookkeeping program, but with minor adjustments I think it could.  I manually enter our sales into Quick Books, so I can make any necessary adjustments at that time.  In this case, when I enter the sale, I'll put the $6.07 against her existing credit.

Judy T Shumway
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Going back through here as now I have an issue of the tax re-calculating when we try to use a gift certificate( that is a paper creation of our studio, not a bought plastic kind.). So, we use this work around of the "other payment type" to make it happen . BUT my question now is : if I just buy the Square Gift Cards will I need to do the work around ? Or will it process correctly because it is a Square Feature ? @GlassJudy @Helen ?

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Alumni

Hey @IndigoSkin - With Square Gift Cards, there's no workaround needed. Accepting Gift Cards is a built in payment type with Square's POS so there's no need to process them as 'Other Tender'. 

 

Learn more here

 

 

Justin
Community Moderator, Square
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I’m looking for this too! I’m a DS consultant & choose to use Square to invoice my clients instead of PayPal as I find it more professional looking. However, when I offer personal discounts, i.e. 15% off one product, which comes out of my personal commission, I’m unable to adjust for the 6% tax on that discount, which I pay to the DS company, so now I’m down 6% more - making that 21% I’ve lost on that sale... unless I do a $$ off amount - and not every customer can equate the $$ off amount to a % when I have told them I will give them a % off! I run discount campaigns often to generate sales & gain new customers. Hey Square, please fix this quickly - looks like your customers have been asking for this for 3 years???

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