Use Conditional Sales Tax Rules with the Square App

Whether your customers are dining in or taking their order to go, you can apply conditional sales tax accurately and automatically with the Square app on an iOS or Android device. Customise your tax settings from your online Square Dashboard so they work in tandem with your existing Dining Options. 

Manage Tax Rules Online

Set Up Tax Rules

Before getting started, make sure to complete the following:

• Turn on Dining Options

• Create at least one item

• Create at least one tax

Create Tax Rules to omit taxes based on your Dining Options and Items. To apply Tax Rules correctly at checkout, update the Square Point of Sale app on your iOS or Android devices. 

1. Go to Account & Settings in your online Square Dashboard and select Business information > Sales taxes.

2. Select the tax you want to add an exemption rule to or click Create Tax to make a new tax.

3. Toggle on Add exemption rule to specify when the tax should not be applied. Note: You can only create one exemption rule per tax.

4. Enter the tax exemption name.

5. Choose exempt locations.

6. Choose one condition: For selected items or If dining option is used.

7. If you set your tax exemption rule as For selected items:

   1. Click Select Items and choose the items that are exempt for this tax.

8. If you set your tax exemption rule as If dining option is used:

   1. Click Select Dining Options and choose the dining option that will trigger this tax rule. To customise your dining options, go to Items > Settings > Dining Options to edit, add or remove.

   2. Click Assign Items to select items that will have taxes omitted.

9. Click Save

Edit Tax Rules

1. From your online Square Dashboard, navigate to Items > Sales taxes.

2. Click the tax rule you’d like to modify to edit the rule.

3. Click Save.

Tips for Using Tax Rules

• Conditional tax rules allow you to preset conditions where taxes won’t be applied. During setup, make sure to select items that won’t have tax applied when a specific dining option is used. For example, let’s say coffee ‘Eat in’ should be taxed, but coffee ‘Takeaway’ shouldn’t be. You’ll want to create a tax rule that removes sales tax when the ‘Takeaway’ dining option is applied, and then add the coffee item to the rule.

• Similar to dining options, conditional taxes can be applied to all items in the cart, or to individual items. Dining options and tax rules work together, so a tax rule will apply to sale based on how the linked dining option is applied to the sale (either to the entire cart or to a specific item). Learn more about applying dining options from the Square app.

• A tax rule can’t be applied to a cart total – only to the items in the cart.

• Tax rules aren’t compatible with item modifiers.