Using Departments to Add Tax to Products

Tax is set on a department, not on individual products — every product filed under a department is taxed by the tax category that department points at. Set your alcohol tax once and every bottle in that department charges it, instead of touching products one at a time.

How Department Tax Works

Access requirements. You'll need edit access to Settings to create tax rates and tax categories, and edit access to Departments to choose which category a department uses. Departments are a merchant-wide setting, not scoped to a single store.

Three pieces stack up. A tax rate is a percentage you charge. A tax category is a named bundle of one or more rates. A department points at one tax category, and every product in that department is taxed by it.
The department is the only place tax is set. There is no tax field on a product or an item anywhere in Back Office. If two products need to be taxed differently, they have to sit in different departments.
A department you don't charge tax on uses Non-taxable. Your account comes with a built-in Non-taxable category that holds no rates. Default tax category is required when you create a department, so choose Non-taxable for anything untaxed. A department set up before this may still have the field blank, and its products ring up untaxed until you choose a category.
A change applies to every product already in that department , not just to products you add afterwards. Your terminals pick it up on their own within a few moments.
All the rates in a category are added together. A category holding a 6% rate and a 2% rate charges 8% on every item in the departments that use it.

Where to Access Each Feature

To…	Go to
Create or edit tax rates and categories	Settings → Taxes
Set which tax category a department uses	Products → Departments → the department → Accounting setup
See at a glance which category each department uses	Products → Departments, the Tax category column
Move one product to a different department	That product's drawer → Edit department
Move many products at once	Products → Product list → select them → Edit product families

Creating the Tax Rates You Charge

Do this first — a tax category has nothing to hold until at least one rate exists. Skip ahead if your rates are already set up.

In the left menu, open Settings, then click Taxes. The page is headed Tax management.
Under Tax rates, click Create tax rate. A New tax rate window opens.
If your stores sit in different tax zones, choose which Stores this rate applies to. This field only appears when your account has more than one tax zone.
Enter a Name . This is the name that appears on customer receipts.
Optionally enter an Internal name — a separate label just for your own reference in this table.
Leave Rate type on Percent . New rates are always percentage-based.
Enter the Rate as a decimal, not a whole number. Type 0.08 for 8%.
Leave Application level on Item . New rates always apply per item.
Click Create . The new rate appears in the table showing its percentage and an Active status.

Repeat for every separate rate you charge — state, county, city, and so on. Keep them as separate rates rather than adding them together into one; that is what lets you mix and match them per category in the next step.

Grouping Your Rates into a Tax Category

A tax category is the thing a department actually points at. Create one for each distinct way you tax products — for example one for alcohol and one for general merchandise.

Still on Settings → Taxes , scroll to Tax categories and click Create tax category .
Enter a Name that describes what it taxes, like Alcohol .
Enter a Tax code . This field is required, so the window won't save without it.
Optionally enter a Description .
Under Tax rates, select every rate that belongs in this category. You can pick more than one, and they are charged together.
Click Create.

You don't need to build a category that charges nothing — Non-taxable is already in your list of tax categories. It can't be renamed or deleted, and no tax rates can be added to it, so it always charges nothing. That is the category you point gift card, deposit and other untaxed departments at.

Pointing a Department at a Tax Category

In the left menu, open Products , then click Departments .
Click the department you want to set tax on. To create a new one instead, click + New department.
Scroll down to the Accounting setup section.
Choose a Default tax category from the list. You have to pick one on a new department — choose Non-taxable if the department shouldn't be taxed.
Click Save. A Department updated confirmation appears.

Every product in that department is now taxed by that category — including the products that were already in it.

Putting a Product in the Right Department

Because tax follows the department, a product taxed the wrong way is almost always a product sitting in the wrong department.

To move one product:

Go to Products → Product list and open the product.
Open Edit department .
Pick the department from the Department list, then click Save .

To move many products at once:

Go to Products → Product list .
Select the products you want to move.
In the Edit product families list, choose Edit department.
Choose the department from the Department list. You have to pick one — this can't be left blank.
Click the Update button, which names how many items you selected.

Department is also required when you create a product, so every product has one from the start.

Checking Your Setup at the Register

The quickest way to confirm a department is taxed the way you meant is to ring one of its products up.

At a terminal, add one of the department's products to a sale.
Look at the Tax line in the cart summary. It shows the tax for everything currently in the sale.
If the Tax line doesn't move when you add that product, the item isn't being taxed — work through Troubleshooting below.

You don't need to complete the sale to see this, and you don't need to restart or re-sync anything after changing a setting in Back Office — terminals pick up tax and department changes on their own within a few moments.

A customer marked Tax exempt, or a sale marked tax exempt, pays no tax at all no matter which department the items are in — so use a regular sale when you're testing.

Troubleshooting

An item rings up with no tax at all: check its department's Default tax category under Products → Departments → Accounting setup . A blank one means no tax. If a category is set, open Settings → Taxes and check that the category actually has rates attached to it.
An item is taxed at the wrong rate: it is in the wrong department, or its department points at the wrong category. Check the Tax category column on Products → Departments first, then check the product's own department.
A department's tax category went blank on its own: deleting a tax category clears it from every department that was using it as the default, with no warning. Re-point the affected departments at a different category.
You typed 8 in the Rate field and the table shows 800%: rates are entered as decimals. Edit the rate and enter 0.08 for 8%.
You changed a department's tax category but the register hasn't caught up: give it a moment — terminals pick the change up on their own shortly after you save.
Two products need different tax but sit in the same department: there is no per-product tax setting. Create a second department with the tax category you need, then move those products into it.
You can't find the Departments page or the Taxes page: you need edit access to Departments and to Settings respectively. Ask whoever manages users at your store to check your access.