Tax Included and How to Back Out the Sales Tax

ShopKeep currently supports items to be either taxable or non-taxable. Multiple tax groups can be created, but only one group can be applied to each inventory item at a time. See more about where to add your sales tax here.

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Tax Included

Some states and cities have multiple tax rates. For instance, drinks are taxed at 8.75% and food at 7.75%. To handle this situation we recommend the following workaround:

1 Change your items sale prices to include tax.

2 On your receipts, add a line telling your customers tax is included.

3 All your drinks that are taxed at 8.75% should all be in a department called DRINKS.

4 All your food taxed at 7.75% should be in a department called FOOD.

5 If you have non-taxable items put them in yet another department to keep them separate.

6 At the end of the month run a sales by department report and back out the proper tax from the total sales in each department.

Back Out Tax

1 To back out the tax, divide total sales by 1 plus the sales tax for that department to get the amount before tax.

Example

Sales tax rate for the FOOD department: 7.75% = .0775

Total sales including sales tax: $18,295

Total sales NOT including sales tax = $18,295 / 1.0775 = $16979.11

Total sales tax = $18,295 – $16979.11 = $1315.89

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