Create and Manage Your Sales Tax Settings
Please note that this guidance is general in nature and does not constitute legal, tax or any other type of professional advice. If you are unsure about your tax or where to find the relevant information, we suggest that you consult with a professional.
With Square Point of Sale, you can apply taxes to your sales and create custom taxes. Enable your team members to edit taxes at the time of a sale through your team permissions and track your taxable and non-taxable sales in your online Square Dashboard.
Square’s fees are taken out of the total amount of each transaction, including tax and tip.
Create Sales Taxes
Create sales tax online
Go to Account & Settings from your online Square Dashboard.
Click Business information > Sales taxes.
Click Create tax.
Enter the tax name and rate, and select the location.
Choose All taxable items to apply the tax to all current and future taxable items in your library, or choose Select items to pick specific items. You can also apply the tax to custom amounts and include a service charge. Note: If an item is set as Non taxable, taxes will not be auto applied to such an item on any of the Square orders across Square Online and Point of Sale.
Choose Add an exemption rule to specify when this tax shouldn't be applied.
Choose Include tax in item price to show one amount: the combined sales tax and item price. If toggled off, the tax will display as a separate line item.
Create sales tax in-app
From the Square Point of Sale app:
From the navigation bar at the bottom of your screen, tap ≡ More.
Tap Settings > Checkout > Sales taxes.
Tap the tax you would like to modify or create a new tax. On a mobile device tap the + icon. On a tablet, tap Add a New Tax.
Fill out the tax information.
Tap All items and services to apply this tax to all current and future items and services, or tap Select items to choose which items will automatically incur this tax.
Select Services to choose which services will automatically incur this tax. Tap the back arrow after selecting specific items and services.
Toggle on Custom Amounts to apply this tax to amounts entered at the time of a sale.
Tap Item Pricing and select if this tax will be included in items prices or added to a price at the time of a sale.
Note: The option to apply tax to All items and services is currently available on the Square Point of Sale, Square Appointments, and Square Invoices apps.
Disable or Delete Sales Taxes
View Taxes from Item Level
Go to Items & orders > Items from your online Square Dashboard.
Click an item to bring up the item details page. If taxes have been applied to an item, they will be listed under the Taxes field.
You can mark an item as non taxable. Taxes will not be auto applied to such an item on any of the Square orders across Square Online and Point of Sale.
If there is no sales tax applied, click Account & Settings > Sales Tax to get started.
Note: Sales tax and custom taxes will automatically apply to sales where a custom amount is entered. To disable taxes for custom amounts visit your tax settings in the app.
Edit Taxes at the Time of Sale
From the Square app, tap Checkout > Review Sale.
Tap an item.
Under Taxes, toggle applicable tax rates on or off.
Note: From the Current Sale screen, you can also tap Tax to view all tax rates applied to the current sale. Tap the red X icon to remove a tax rate from applicable items within the sale, then tap Save to return to checkout.
Create Tax Exemptions
You can create tax exemption rules on your online Square Dashboard to apply them to sales across your devices. These rules can exempt specific items or item categories from taxes. You can also create a tax exemption rule for price thresholds. Learn how to create and manage tax exemption rules with our Tax Exemption Guide.
Set Up Taxes in Square Online
Manage Taxes with the Catalog Import Tool
Once you've created sales taxes, you can apply the tax to your catalog via the catalog import.
Once the tax rate is created, click Items > Actions > Export Library in your online Square Dashboard.
Once exported, tax columns will appear at the end of the spreadsheet. From here, enter Y or N in each item row to apply, or not apply the tax rate to the selected item in the catalog.
For large catalogs, items can be sorted by category, or a formula can be written to facilitate the bulk application of tax rates.
Once tax rate(s) has been assigned to items within the spreadsheet, go back to Items > Actions > Import Catalog > Modify Item Library to upload any changes.
Note: When editing any existing catalog items from the spreadsheet, do not edit or remove the value in the Token column. Upon reimporting, the token is used to identify the existing item in the catalog.
Add Tax Registrations
You can manage and automatically calculate sales taxes for shipping orders placed through Square Online as well as Retail POS. For accurate tax calculation, you must review your tax registrations. A tax registration state is one where you have a business presence. This could be your storefront, home office, warehouse or a ship from location. We have pre-configured your tax registrations based on your Square locations.
Add new tax registrations if you plan to ship orders from a state in which you have a business presence, but which is outside of your existing registrations. To do so:
In your online Square Dashboard, go to Account & Settings > Business information > Sales Taxes.
Under 'Tax Registrations', select Manage.
Toggle on each state where you have a tax registration. Toggle off to deactivate.
Select Add tax registration to add a new state.
Select the dropdown and choose a taxing state.
Select Save to save newly added taxing states.
Tax calculation will apply to all shipping orders.
Note: If you create a new POS location in a specific state, that state will automatically appear under your ‘Tax Registrations.’