RoasterPay: Calculating Taxes on Orders

In this article we will cover how tax calculation works and how to process orders that have a mixed tax status.

Calculating Taxes

Taxes are calculated based on the combination of:

• Customer Tax Status
• Product Variant tax code
• Your tax registrations
• Customer Shipping address and the local taxes in that jurisdiction

When Do We Calculate Taxes?

When an account has tax enabled, the system checks several conditions before deciding whether to calculate taxes. We only calculate taxes if all of the following are true:

• ✅ The customer’s tax status is set to taxable.
• ✅ The order’s shipping address is in a state where sales tax is collected.
• ✅ The shipping address matches a state that you're registered to collect tax in.

If any of these conditions are not met, we do not calculate taxes, and tax-related information will not be displayed for that order.

• ✅ If all the above conditions are met, we then look to the variant's tax code to know what tax to calculate per the shipping address.

When Is Tax Calculation Triggered?

Whenever an order is submitted or updated, we check if it requires tax calculation. This happens in the following cases:

1. When an order is submitted in the portal 
2. When an order is created via the app (Orders → New Order).
3. When a submitted order is updated in the app.
4. When a payment is created for an order.
5. When a RoasterTools created order updates the shipping rate via the Shipstation connection (delivery method has Live Shipping) 

If any of these actions occur, we check whether the order needs tax calculation before proceeding.

How Tax Shows Up

Visibility of Tax Rates on Invoices

To see which items are taxed and at what rate on an invoice, look for the “T” badge next to the unit price on each line item. Hover over the badge to view a breakdown of how tax is calculated for that item.

You can also hover over the info icon next to the tax line above the invoice total. This will give you a full breakdown of the total tax collected for that invoice.

Visibility of Tax Code

To see what tax code is used for a specific product, head to the product page. You can view the tax for each variant by hovering over the tax badge next to the SKU. This will show you the specific tax code applied.

Customer with Resale Tax Status:

Because customers with resale tax status may purchase a mix of taxable and non taxed items, we identify those customers' orders on the orders page as well. This helps to call out orders you may want to review the tax and make updates if needed. (see next section for more details on this)

Tax Calculations in the Portal

Taxes are calculated on orders placed in the portal based on the criteria shared above. The taxes will not be calculated until the final order is placed.

• When items are added to the cart the tax will say TBD
• A customer will select "Checkout"
• The tax will still state TBD until they select "Place Order"

• On the "Thank you" page, it will state the Tax calculated on the order

  

There are a few exceptions to when taxes are NOT calculated in the portal:

1. The Customer must have a default delivery method with a known cost
   • If there is no Default Delivery Method - the shipping field will say TBD and tax cannot be calculated yet
   • If there is a shipping method with a LIVE or CUSTOM rate - the shipping field will say TBD and the tax cannot be calculated yet
2. If a customer orders items with Mixed Tax Statuses
   1. You should NOT have them on Prepay terms as you need to review the order after it is placed and Manually update items that are taxed.

Resale Customers and Orders With Mixed Tax Statuses

Customers with a Resale tax status are set up to buy tax-free for items they are reselling — but not everything they order is always exempt.

When a resale customer buys items for their own shop (filters, cleaning supplies - usually taxable) alongside items for resale (coffee - tax exempt), you'll need to update the taxable items manually.

View this video Overview:

Example:

A resale customer orders 1 bag of coffee (for resale — exempt) and 1 box of Fetco filters (for in-house use — taxable). Because their status is Resale, both items start as Resale – Non-taxable.

To charge tax on the filters, you edit the order and change just that line item's tax status.

How to Identify orders that need a tax update

There are two ways to spot resale orders worth reviewing:

• Resale badge: On the Orders page, resale customers show a resale badge next to their order.

  

• Search the Fulfill page: If only a few of your products are ever taxable, search the Fulfill page for those items (e.g. "filters" or "cleaning supplies") to surface the orders that contain them, then click the invoice icon to open and update.

  

How to update the tax on a line item

1. Select the order number.
2. Click Edit.
3. Find the line item(s) that should be taxed.
4. In the Tax Status column, open the dropdown, choose the right status, and click Update.

You should notice on the order a tax badge (T) show up on the items being taxed.

What Happens When Tax Calculation Fails?

The impact of a failed tax calculation depends on where it was triggered.

1. Portal: Order Submission

If tax calculation fails when submitting an order from the Portal, the contact will see an error message and won't be able to submit the order.

2. Creating a Payment for an Order

If tax calculation fails when creating a payment, the user will see an error message and won't be able to proceed with the payment.

3. Creating or Updating an Order in the App

If tax calculation fails after an order is created or updated, the user will see "Error" where the tax amount should be.

Any actions that were disabled while taxes were being calculated will remain disabled until the issue is fixed.

Hovering over the error will show a tooltip explaining why the calculation failed.If possible, the user can fix the issue and then manually trigger a recalculation from the tooltip.

Recalculating After an Error

• When an order is in an error state, simply updating the order will NOT trigger a recalculation.
• To retry, the user must click the button in the tooltip to manually launch the tax recalculation.

Tax Reports

You can download Tax Reports from the Insights Tab - See our help article -> Here

When Is Tax Calculation NOT Triggered?

Tax calculation does not automatically run in the following cases:

• When a tax registration is added or removed.
• When a shipping address is updated (in the customer edit form, not within the order form).
• When a tax code is changed for any variant.
• When tax is enabled or disabled for the account.

If any of these changes occur, existing orders will not automatically recalculate taxes. However, tax will be recalculated the next time the order is updated—even if no actual changes are made.