Configuring Sales Taxes in the POS

• About Sales Taxes in the POS
• Setting up a Sales Tax in the POS
• Assigning a Sales Tax to Items (via a Category)
• Removing a Sales Tax from Items (via a Category)
• Configuring a Declining Meal Plan to be Tax Exempt
• Configuring a Diner Charge or Department Charge Account to be Tax Exempt
• Removing/Deleting a Sales Tax from the POS
• How Sales Taxes are Calculated
  • Multiple Sales Taxes
• How a Tax-Exempt Payment Tender is Calculated
  • Refund of Item on Day of Sale
• FAQs
  • Can a sales tax be charged to a group of diners, but not charged to another group of diners?

About Sales Taxes in the POS

POS needs to be set up with the sales taxes applicable to your jurisdiction. When a sales tax is set up, it is available to be assigned to a category or an individual product. 

• When one or more sales taxes are assigned to a category, then those taxes will be the default taxes for the items/products/services of the category upon checkout.
• When one or more sales taxes are assigned to a product, then those taxes will override the default sales taxes of its parent category.

Setting up a Sales Tax in the POS

To set up a sales tax in POS, complete the following steps:

1. In Touch Admin, click POS Settings > Taxes. The POS Taxes screen appears.
2. Click the Add a Tax Code button.
3. Enter or select the following:
   • Name - name of the sales tax (e.g., state tax, provincial tax, federal tax).
   • GL Account - select the GL Account the tax is to be associated with. Note that GL accounts are first set up by your MealSuite CSM (customer success manager) to be available for assignment (if you are a MealSuite CSM, click here for the internal article on setting up GL accounts). 
   • Percentage - enter the percentage of the tax.
   • Billing Code - select the billing code the tax is to be associated with. Note that billing codes are first set up by your MealSuite CSM (customer success manager) to be available for assignment (if you are a MealSuite CSM, click here for the internal article on setting up billing codes). 
4. Click the Create Tax Setting button to apply your changes. You are returned to the POS Taxes screen, where the newly-added tax is listed.
5. To added another sales tax, repeat the above steps. 

Assigning a Sales Tax to Items (via a Category)

The means to assign a sales tax to items so that they are taxable in a POS transaction is via the category the item is assigned to. To assign a sales tax to a category so that its items are taxable, complete the following steps: 

1. If applying the sales tax to a menu category, open the menu category. If applying the sales tax to a non-menu category (for products and services), open the non-menu category. 
2. In the Tax Assignment field, select one or more sales taxes. When a menu item or product is checked out, then the sales taxes of the category is applied.
3. Click the Update button to apply your changes. 

Note: You can also directly apply a sales tax to a product, which will override the sales tax of the product's category.  

Removing a Sales Tax from Items (via a Category)

If you do not want items to be taxable in a POS transaction, then you can remove the sales tax from the item's category. To remove a sales tax from a category. 

1. If removing the sales tax from a menu category, open the menu category. If removing the sales tax from a non-menu category (for products and services), open the non-menu category. 
2. Currently-assigned taxes to the category are listed in the Tax Assignment field. Click the x icon of a tax to remove it from the Tax Assignment field. 
3. Click the Update button to apply your changes. 

Configuring a Declining Meal Plan to be Tax Exempt

A declining meal plan can be configured to be tax exempt, meaning a user who uses the declining meal plan will not be charged tax for transactions covered by the meal plan. To configure a declining meal plan to be tax exempt, ensure its Declining Balance Only: Charge regular taxes for transactions setting is not selected (click here for information and instructions). 

Configuring a Diner Charge or Department Charge Account to be Tax Exempt

Both a diner charge account and a department charge account can be configured to be tax exempt, meaning a user who uses the charge account will not be charged tax for transactions.

• To configure a diner charge account to be tax exempt, ensure its Covered Items are Tax Exempt setting is selected (click here for information and instructions). 
• To configure a department charge account to be tax exempt, ensure its Covered Items are Tax Exempt setting is selected (click here for information and instructions). 

Removing/Deleting a Sales Tax from the POS

To remove/delete a sales tax from the POS system, complete the following steps:

1. In Touch Admin, click POS Settings > Taxes. The POS Taxes screen appears.
2. For the sales tax you want to be removed, click its Delete button. A confirmation message appears.
3. Click OK to the confirmation message to remove the sales tax.

How Sales Taxes are Calculated

In the POS, taxes are applied to each line item individually, as opposed to adding taxes to the subtotal of all the items in a ticket.

Applying taxes to each line item ensures accurate and transparent calculations. It allows for a clear breakdown of the tax amounts associated with individual items, enabling customers to verify the accuracy of their purchase. Additionally, this method provides clarity in case of returns or exchanges, as it allows for precise adjustments to be made on a per-item basis. 

It is important to note that the Mealsuite approach to tax calculations aligns with industry standards and legal requirements.

Example:

The above table shows how each line item is taxed, rounded, then totalled, for a total cost of $9.47 as opposed to $9.45 if the tax percentage (5%) was applied directly to the subtotal of $9.00.

Multiple Sales Taxes

When two or more sales taxes are applied, then each tax is individually calculated for the item and added together. For example:

How a Tax-Exempt Payment Tender is Calculated

When a tax-exempt payment tender (e.g., meal voucher provided to a volunteer) is used, the value of that tender is prorated across all items to calculate the new item prices, which are then taxed according to each item’s tax rate.

MealSuite prorates items per the following formula:
The individual item price divided by the total price of all items multiplied by the payment tender value.

Assume the tax-exempt value being applied is $7.00. The calculations are as follows:

Refund of Item on Day of Sale

Void Refund - If an item is returned within the same day (i.e., before close time) and can go back to inventory (e.g., it was not consumed or damaged), then the item is voided from the original ticket and the calculations redone. Assume the chips from the ticket are voided:

100% Discount Refund - If the item being refunded cannot be returned to inventory, then a 100% discount is applied to the item, as this will allow for cost and inventory tracking. Assume the chips from the ticket are 100% discounted:

Note: The category of an item (e.g., alcohol category for a beer item) can be configured not to be covered by discounts. This is accomplished in Touch Admin via POS Settings > Categories and selecting the Cannot be discounted check box. 

FAQs

Can a sales tax be charged to one group of diners, but not charged to another group of diners?

No. A sales tax cannot be configured to be charged to one group of diners (e.g., guests), and not charged to another group of diners (e.g., residents/staff).

However, a declining meal plan, a diner charge account, and a department charge account each can be configured to be tax exempt. Therefore, if a diner uses that declining meal plan, diner charge account, or department charge account, they will not be charged taxes.