Tax classes let you tax items at a different rate than your default sales tax. Items assigned to a tax class will always be taxed at the different tax rate than your default rate when they're scanned at the register. 

For example, if clothing is tax-exempt in your shop, clothing items assigned to the Clothing tax class will be taxed at 0% instead of 8.875% when scanned at the register.

Tax classes are applied only to item groups that always need to be taxed at a different rate, like groceries or children's items. Sales taxes are applied to all items sold at a location, to a specific customer, or in a sale.

Adding a tax class

1. In Retail POS, navigate to Settings > Tax Classes.
2. Click + New Tax Class.
3. Enter a class name.
4. Click Save Changes.

Adding the class tax rate

1. Navigate to Settings > Sales Taxes.
2. Click your shop's Sales Tax.
3. Under Add Sales Class Tax Rate, click the Class dropdown and select the tax class you previously added.
4. In the Class Tax Rate field, enter the tax rate of your new tax class.
5. Click + Add New Rate.

Assigning items to a tax class

Once you've added your tax class to a location, you can assign items to it. To assign an individual item to a tax class:

1. Navigate to Inventory > Item Search.
2. Locate the item you want to assign to a tax class and click it to access its item details page.
3. Under Pricing, click the Tax Class dropdown and select the tax class.
4. Click Save Changes.

You can also assign items to a tax class with quick edits.

Bulk assigning items to a tax class

To bulk assign items to a tax class, follow steps to import items using a spreadsheet.

Removing tax from an item

Before you can remove sales tax from a sale, you must have either a tax class or sales tax set at 0% (exempt). Tax-exempt classes remove taxes for an item, tax-exempt sales taxes remove taxes for a specific customer or an entire transaction.

Removing tax from an item

1. Navigate to Inventory > Item Search.
2. Locate an item and click it to access the item details page.

3. Uncheck the Taxable box, or select a special tax class from the dropdown.

   

4. Click Save Changes.

This item will still be displayed under your sales tax, but at a rate of 0% taxable.

Removing tax from an item during a transaction

1. From an in-progress sale, under Description, click the item's name.

2. Click the Tax Class dropdown and select a special tax class.

   

3. Click Save.

You can also use a specific sales tax to remove tax for a customer or an entire transaction.

What's next?