Create and manage sales tax settings
About sales tax settings
With Square, you can apply taxes to your in-person and online sales, and create custom taxes with specific rules.
The amount of sales tax charged on an online purchase is determined by applying the tax rate to the total price of taxable items in an order. Depending on business needs, you can include tax in the item price, charge tax on local delivery fees, use in-person tax rates for pickup, local delivery, and QR code orders, and more.
Before you begin
You can set all taxes through your Square Dashboard and set in-person sales taxes through your Square Point of Sale app. If you have a Square Online account, you can also set your Square Online taxes and international shipping sales from Square Dashboard.
Create in-person sales taxes
You can create in-person sales taxes through the Square Dashboard or the Square POS apps.
- Sign in to your Square Dashboard and select Account & Settings > Payments > Sales taxes.
- For Sales taxes, select Create tax.
- Under Details, enter the tax name and rate and select the locations where the rate applies.
- Under Tax application, choose to apply the tax to All current and future taxable items at selected locations or choose Select items to choose specific items to apply the rate to. If an item is set as non-taxable, taxes won’t be automatically applied to the item on any orders across Square Online or Square Point of Sale.
- Toggle on Apply tax to custom amounts to apply the tax to any custom amounts added to the cart.
- Under Tax calculation, choose Additive tax to have tax as a separate line item on customer receipts or Inclusive tax to have tax included in the item price.
- Under Tax exemption, toggle on Add exemption rule to specify when this tax should not be applied.
- Select Save when finished.
- Open your app and select ≡ More > Settings > Checkout > Sales taxes.
- Select the plus icon (+) to create a new tax.
- Enter the tax name and rate.
- Under Tax application, choose to apply the tax to All items and services (current and future) or choose Select items to choose specific items to apply the rate to. If an item is set as non-taxable, taxes won’t be automatically applied to the item on any orders across Square Online or Square Point of Sale.
- Toggle on Apply tax to custom amounts to apply the tax to any custom amounts added to the cart.
- Tap Item pricing and select Add tax to item price to have tax as a separate line item on customer receipts or select Include tax in item price to have tax included in the item price.
- Tap Save.
Charge tax on shipping and local delivery fees
When using the automatic tax calculator, sales taxes are automatically applied to shipping fees. If you use Square Online, you can also choose your tax rates for online orders. When a customer has different billing and shipping addresses, only their shipping address matters in terms of charging tax. For orders that are picked up or locally delivered to the customer, local sales tax is added accordingly.
To charge shipping and delivery taxes:
Sign in to your Square Dashboard and select Account & Settings > Payments > Sales taxes.
Under Shipping and delivery taxes, select Manage settings.
For Delivery sales tax, select Apply automatically generated tax rates or Use in-person rates for delivery sales tax.
Toggle on Apply tax to delivery fees if you want to charge your buyers a fee on delivery orders.
For Shipping and non-physical sales, select Apply automatically generated tax rates.
Select Save.
If you use Square Online, you can also adjust your Square Online tax settings.
For Square Online Pickup sales, select Apply automatically generated tax rates or Use in-person rates for Square Online sales tax.
For Square Online QR code sales, select Apply automatically generated tax rates or Use in-person rates for Square Online sales tax.
After you set all your taxes, set your calculation method settings. These settings apply to orders for which you've selected to use automatically generated taxes.
For Calculation method, select Additive tax to add the tax as a separate line item on your customers’ receipts or select Inclusive tax to include tax as part of item prices
Select Save.
Create tax rates for other countries
To set sales taxes for all international shipping sales made through Square Online:
Sign in to your Square Dashboard and select Account & Settings > Payments > Sales taxes.
Under Shipping and delivery taxes, locate International shipping and select Manage international tax.
Select Add tax rate and select a country from the drop-down menu.
Enter the Country Tax Rate and add a customer-facing Tax Name.
Select Save then select Done.
Add tax registrations to automatically calculate CA taxes
A tax registration state is one where you have a business presence, which could be your storefront, home office, warehouse, or a ship-from location.
The automatic CA tax calculator charges CA sales tax based on all tax registrations you added to your Square account and where you fulfill an order. Square sets your tax registrations based on your Square locations, but you can always add more if you plan to ship orders from a province in which you have a business presence (but is outside of your existing registrations). If you create a new Point of Sale location in a specific state, that state automatically appears under your Tax Registrations. To add a new tax registration:
Sign in to your Square Dashboard and select Account & Settings > Payments > Sales taxes.
Under Tax Registrations, select Manage.
Select Add tax registration to add a new state.
Choose the taxing state from the drop-down menu and select Add state.
Select Save.
Disable or delete sales taxes
You can disable or delete your sales tax rates at any time from either your Square Dashboard or Square app. Disabling a tax makes it no longer applicable to purchases. If you delete a tax, you cannot undo the deletion, and you will have to create the tax again.
- Sign in to your Square Dashboard and select Account & Settings > Payment > Sales taxes.
- Under Sales taxes, select the tax you want to disable or delete.
- Select the Actions drop-down menu and select Disable tax or Delete tax.
To disable taxes for shipping and non-physical sales from Square Online:
- Sign in to your Square Dashboard and select Account & Settings > Payment > Sales taxes.
- Select Manage settings.
- In the Shipping and non-physical sales section, select Do not collect taxes.
- To disable taxes on delivery, pickup and QR code orders, select Apply In-person taxes then disable or delete the in-person tax.