RoasterPay: Setting Up Tax Calculation
In this article we will cover how to setup tax calculations on your account.
Eligibility Criteria
To be eligible to use our Tax Feature, your account must have RoasterPay activated and application approved before you can ues this feature. See here to start this process.
Accounts not using RoasterPay are not eligible for tax calculations. If you are interested in setting taxes please email support@roastertools.com.
Want to learn more about RoasterPay? Learn more here.
Overview:
Account Tax Calculation Status
There are three status for your account regarding the Tax Calculation feature:
- Inactive
Tax Setup Status
Users can setup tax settings on products and customers but no tax will be calculated
Active Tax Calculation
Taxes are calculated on orders
Enabling the Tax Calculation Feature
Currently, enabling tax calculations requires manual setup by the RoasterTools Team. If an account has been approved for RoasterPay and wants to use this feature, they must request activation from RoasterTools by emailing support@roastertools.com.
Once RoasterTools enables the feature, your account will enter the Tax Setup Status.
- In this state, the system will display tax information on various pages, but taxes will not be calculated yet.
- This allows the customer to set up everything correctly before tax calculations go live.
Setting Up the Account
The below steps should be completed when the account is in Tax Setup Status
Steps to Complete Tax Setup
Update Customer Tax Status
- By default, all customers are marked as taxable.
- Assign the appropriate tax status per customer either though the customer CSV update or per customer.
- The 3 most common tax statuses are Taxable, Resale, or Exemption (see the complete list in the appendix)
- To update the tax status in bulk, use the Customer CSV. Go To:
Username dropdown > Settings > Import & Export > Customers
- Once you open the customer CSV you can assign the tax status in the appropriate column (see list of tax status in the Appendix here).
- Save as CSV and upload the updated document.
- Review customers to ensure it uploaded correctly.
Note: If you have out-of-state customers in states where you do not collect tax, their status may still appear as 'Taxable.' However, since you're not registered to collect tax in those states, no tax will actually be charged.
To update the tax status per customer Go to:
Sales > Customer > Select a Customer > Edit > Scroll to Tax Status > Select Drop Down
Update tax codes for Product Variants
- Each variant must have an appropriate tax code assigned.
⚠️ IMPORTANT: If no tax code is provided, all variants will be considered fully taxable.
- To update the tax codes of variants in bulk, use the Product CSV. Go To:
- Username dropdown > Settings > Import & Export > Product
- Once you open the Product CSV you can assign the tax status in the appropriate column (see list of Product Tax codes in the Appendix here).
- Save as CSV and upload the updated document.
- We suggest you Re-download to review the product tax code and ensure it uploaded correctly.
- To update variant tax codes per product variant
- Go to: Inventory > Product > Edit Product > Select 3 dots on the right of the variant > select tax code
- Once you'd assigned a tax code to a product, the variant will now have a tag to identify it's been assigned one. See below:
Add Tax Registrations
- You need to note any state that you have Nexus in and therefore collect tax on orders being shipped to those states.
To update tax registrations go to:
Username Dropdown > Tax Registrations
- The system will use these registrations along with the shipping address on an order to determine where taxes should be applied for each order
Quickbooks Online (QBO) and Shipping Tax Settings
In some jurisdictions shipping is a taxable item. In order to avoid QBO double taxing the shipping costs you will need to update your QBO settings. You will select a default shipping item in QBO to record shipping costs as a line item on invoices when you sync them.
In order for this to work you will need to do the following:
- Create an item in QBO for Shipping.
- Navigate to your QBO Integration settings in RT: User Name > Integrations > QBO > Edit
- In Shipping Tax Settings select the QBO item you created > click Update QuickBooks Online Settings.
IMPORTANT: Review Before going live with Tax Calculations
- Download the product CSV to ensure the tax codes are what you expect
- Download the Customer CSV to ensure the customer tax status is as expected
- Review the tax registration, that you are registered in the states expected
- Review your QuickBooks Online Shipping Tax settings.
Enabling Tax Calculation
Once you have completed the setup and are ready to begin collecting taxes on orders, the RoasterTools team will need to enable tax collection on your account. Reach out to us at support@roastertools.com
If possible, reach out to our support team ahead of time to identify a time and date for us to “flip the switch” and have the tax calculation begin. If you’re ready “now” also reach out - just know it may not happen immediately.
After this step, taxes will begin to be calculated automatically based on the configured settings.
Important: Review any orders that may need to have tax applied that were placed before tax calculation was turned on. This will need to be manually updated but opening the Order > Edit > Click Update (you dont have to edit anything before updating). This will trigger the tax to calculate.
Appendix
Customer Tax Status List:
| Internal Name | Internal Description | Use this in Product CSV |
| Taxable | Sales Tax will be charged | Taxable |
| Resale | Customer is a reseller and is exempt from sales tax (sometimes they are only exempt on specific items) | Resale |
| Exemption | Customer is exempt from sales tax (ex government, non-profit, etc) | Exemption |
| Direct Pay | Customer handles own tax payments | Direct Pay |
| Manufacturing | Customer is a manufacturer and is exempt from sales tax | Manufacturing |
Product Tax Code List:
Use the Internal Name column in the product CSV to upload new product tax codes.
| Internal Name | Internal Description | Use this in Product CSV |
| Taxable | Taxable goods and services | general |
| Grocery - General | Grocery items that are not ready to consume, but are not coffee or tea | grocery_general |
| Coffee and Tea | Whole bean coffee, ground coffee, and tea that is not ready to consume | grocery_coffee |
| Prepared Foods - General | Prepared foods that are ready to consume, and are not ready-to-drink coffee | prepared_foods_general |
| Prepared Foods - Coffee RTD (unsweetened) | Ready-to-drink unsweetened coffee beverages like cold brew | prepared_foods_coffee_rtd_unsweetened |
| Prepared Foods - Coffee RTD (sweetened) | Ready-to-drink sweetened coffee beverages | prepared_foods_coffee_rtd_sweetened |
| Prepared Foods - Coffee RTD (with milk/dairy) | Ready-to-drink coffee beverages containing milk | prepared_foods_coffee_rtd_with_milk |
| Clothing (apparel/merchandise) | Clothing and apparel items | clothing |
| Service - General | General services | service_general |
| Service - Installation | Installation services | service_installation |
| Service - Training | Training and educational services | service_training |
| Service - Professional | Professional services like consulting, custom roasting, and more | service_professional |
| Service - Repair | Repair services | service_repair |
| Credit Card Processing Fees | Credit card processing fees | credit_card_processing_fees |
| Gift Cards | Gift cards | gift_cards |