Sales Tax Management
Updated over a week ago

Disclaimer: This article is for Lunchbox 2 Enterprise customers only. If your dashboard header looks the same as below, you are in the right place:

Sales Tax Overview


The Sales Tax Tab is where tax data can be viewed, edited, or entered. This article will outline how to make updates to Sales Tax information.


Table of Contents

Introduction

To view, edit or enter Sales Tax information, take a look at the breakdown below, followed by a detailed example:

  1. Identify existing tax, or create new taxes, as needed, under the Tax sub-tab for each sales tax you need to charge and report individually (State Tax, County Tax, etc. or just Sales Tax if you only have one Tax).

  2. Set Tax Rates(s) for each tax you’ll be using. Multiple rates can be set for each tax. For example if your standard tax rate is 7.5%, but bottled water doesn’t get taxed, you would create two tax rates, 7.5% and 0%.

  3. Create tax classes. Tax classes are used to group items based on their tax rate (Bottled Water, Sugary Drinks, etc). You don’t need to create a tax class for items that get your standard tax rate.

  4. Create or use existing Tax Groups for tax reporting purposes.

  5. Assign Tax Classes to Items. You only need to do this for items that get a different tax rate than your standard tax rate (bottled water, sugary drinks, etc)

  6. Create tax rules for each service type under the Service Types tab, by assigning Tax Rates (from Step 2) to Tax Classes or the Default Tax Class (from Step 4)

Sales Tax Setup Example

Let’s say that you have a standard sales tax rate of 10% in Ohio, but bottled water will be taxed at a reduced rate of 3%, 2% for state tax and 1% for city tax, for 3PD orders in Cleveland starting on July 1, 2021. We would create/configure the following:

  • We will use the default Sales Tax from the Tax subtab

  • Set up a Tax Group for both State Tax and City Tax on the Tax Groups subtab

  • Create a Tax Tate of 2% for State Bottled Water Tax on the Tax Rates subtab

    • Select Sales Tax for Tax

    • Select State Tax for Tax Group

    • Enter a start date of 2021-07-01

  • Create a Tax Rate of 1% for City Bottled Water Tax on the Tax Rates subtab

    • Select Sales Tax for Tax

    • Select City Tax for Tax Group

    • Enter a start date of 2021-07-01

  • Create a Tax Class with the name Bottled Water on the Tax Class subtab

  • Assign the Tax Class to your bottled water item on the Assign Tax Classes to Items subtab

Once the above is configured, we will need to assign both the State Bottled Water Tax Rate and the City Bottled Water Tax Rate, along with the Bottled Water Tax Class, under the Tax Rates section of the 3PD service type on the Service Types Tab, for each store in Cleveland, OH.


Create a Tax

To create a global tax:

Step 1: Navigate to the Sales Tax tab in backend management

Step 2: Select the Tax Subtab

Step 3: Specify a Tax Name, External ID (if needed), and Tax Basis

Step 4: Select Create Tax

Note: You can delete a manually created tax by selecting the x icon.


Create a Tax Rate

To create a global tax rate:

Step 1: Navigate to the Sales Tax tab in backend management

Step 2: Select the Tax Rates Subtab

Step 3: Specify a Tax Rate Name, Tax Rate(%), Tax, and Tax Group. You can also specify a Start Date and End Date for the tax rate, as needed

Step 4: Select Create Tax Rate

Note: You can delete a manually created tax by selecting the x icon. You can also modify an existing Tax Rate by changing fields on the table and selecting Update.


Create a Tax Class

After creating your desired individual taxes, create a new tax class for these taxes. A tax class is a collection of tax rates. Creating a tax class lets you select specific items that are subject to this tax. To create a global tax class:

Step 1: Navigate to the Sales Tax tab in backend management

Step 2: Select the Tax Classes Subtab

Step 3: Specify a Tax Class Name and External ID (if needed)

Step 4: Select Create Tax Class

Note: You can delete a manually created tax by selecting the x icon.


Create a Tax Group

Tax groups can be created for reporting/accounting purposes when multiple tax rates are applicable (Ex: State and City taxes). To create a global tax group:

Step 1: Navigate to the Sales Tax tab in backend management

Step 2: Select the Tax Groups Subtab

Step 3: Specify a Tax Group Name and External ID (if needed)

Step 4: Select Create Tax Group

Note: You can delete a manually created tax by selecting the x icon.


Assign Tax Classes to Items

Once you’ve created your tax classes, you need to assign your items to them. To assign a tax class to an item:

Step 1: Navigate to the Sales Tax tab in backend management

Step 2: Select the Assign Tax Classes to Items Subtab

Step 3: Search for the menu item you wish to assign a tax class to

Step 4: Select the Tax Class from the Class drop-down.

Step 5: Select Assign Tax Class

Note: You can delete a manually created tax by selecting the x icon.


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