MicroSale allows for multiple tax configurations from multiple tax rates, occupational tax, tax inclusive, tax exempt, and additional flexibility to set “to go” orders to automatically remove tax.
Disclaimer
You are responsible for the accuracy of sales tax in your MicroSale system as well as ensuring items are properly set to collect tax. If you are uncertain on how to check your tax rate, please follow the Basic Sales Tax article or contact your MicroSale representative.
Understanding Tax Rates in MicroSale
MicroSale uses two tax areas to assign menu items to the appropriate tax;
- Regular (Basic) Tax rates
- Special Tax rates
While a restaurant may pay multiple tax rates on food such as 4% for State Tax and 2% for City Tax, for convenience, a customer is charged a total of 6% Tax on their bill. In other cases, you may have a Regular Tax rate of 6% and need to view your alcohol tax rate of 2% separately. Viewing separate sales tax uses "Special Tax".
Tax rates are set in the Manages Menu > Register Setup > Sales Tax Menu
After the rates are entered, assign menu items to a tax rate table. By default, all menu items are assigned to the "Sales Tax Table" 1. This is your standard tax rate. To disable tax completely, you can either untick the option "Menu item is taxable" or you can set the tax rate to 0. 0 disables the tax rate.
Basic Tax Rates (State Tax)
Follow this area to setup your basic sales tax.
Alcohol/Liquor Tax
Depending on your city, you may have a separate tax for alcohol in addition to your state tax. This can be calculated on the net amount of all alcoholic items on the check. MicroSale can separate the tax amounts as separate line items on both the customer receipt and POS reports.
Tax Inclusive
Often bars make alcoholic items tax inclusive, which means that the price of the menu item already includes the tax. This is beneficial, as you can make your drinks whole dollar amounts and eliminate the need for change. MicroSale automatically backs out the value of the tax for reporting purposes to give you an accurate reading of your alcohol tax.
Example of tax inclusive:
A customer is charged $3.00 for a Budweiser. With a tax rate of 7%, the reports show that the Budweiser was sold at $2.80 and collected $.20 in tax (.196 rounded up).
Setting up menu items to include tax
Smart Tax
This is useful for restaurants who would like alcohol-only checks to be Tax Included to optimize speed, but for tickets with Drinks and Food to be Tax Not Included. This is useful for restaurants who would like alcohol-only checks to be Tax Included, but tickets with alcohol and food to be Tax Not Included.
By default, MicroSale is set for Smart Tax. To learn more or disable smart tax, please follow this article.
Occupation Tax ("stacked" tax)
An occupation tax may be collected, depending on your city. An occupation tax is essentially a "license tax", or a tax paid as a cost of doing business. In some cities, you are allowed to offset this tax by passing it to the customer's bill as a separate line item. Typically, the occupation tax is calculated before any state and local taxes are calculated.
For example:
| Net amount of check | $50.00 |
| Occupation tax (2%) | $1.00 |
| Subtotal | $51.00 |
| State Tax (7%) | $3.57 |
| Final Total | $54.57 |
Multiple Tax Rates (Beer tax, liquor tax, state tax)
You may need charge three tax rates at your restaurant. For example, you may have a State Tax, Beer Tax, and Liquor Tax.
Advanced Order Type Tax Exemptions (i.e. Ohio Tax)
If your city excludes tax for specific items on take out, delivery, and drive through sales, please follow this guide.
Setting up tax exemptions/exceptions
Setting up & using the Tax Exempt function button
To allow the user to choose when an item(s) are tax exempt. Follow this article.
Tax Exempt Order Destinations (forcing order destinations to prompt)
If a specific order destination or multiple destinations are always tax exempt, you can set the system to automatically exempt the tax to eliminate possible manual errors. When using this feature, all order destinations prompt when you select the “Dine In” button on the order screen.
Setting up tax exemptions by order destination
Advanced Tax Setup (VAT Tax and setting up Tax Chart Thresholds)
Total sales tax collected by not be an exact match to the net sales x tax rate because of rounding with fractions of pennies.
Setting up tax chart thresholds
Setting up Alternate Tax Added for tax inclusive items
Provincial Sales Tax (Canadian Sales Tax)
**for Canada only**
"Provincial sales tax (PST) is a retail sales tax that applies when a taxable good or service is purchased, acquired or brought into B.C., unless a specific exemption applies."
Disabling Tax Exemptions by tax table
This setup article is rarely used. However, if your city never allows a certain tax table to be exempt, follow this article.
Setting up "Tax Exempt" to only exempt a specific tax table
How can I tell what items are being taxed and if the tax is being charged correctly?
A good place to start is by understanding the regulations applicable to your business, as well as any exemptions that apply. Once you have a good understanding of what taxes need to be collected and at what rate, you can then set up each item in the system with the appropriate values.
Nearly all reports in MicroSale include information about taxes, however, to get a more detailed and itemized view of your menu items' taxes, you may need to run a couple different reports.
Sales Summary Tax Report
A sales summary tax report is used to track the amount of taxes collected for a given period of time. The report includes information such as total taxable sales, total sales tax collected, and the amount due to the relevant tax authorities. Sales tax reports are typically filed on a regular basis (monthly, quarterly, or annually) and must be in line with local regulations. The report can also be used to reconcile discrepancies between what has been reported and what is actually owed.
Viewing Individual Menu Items' Tax Rate Assignments
To view menu items' tax rate assignments, go to Managers Menu > Menu Maintenance > Menu Items and Pricing
- Select the dropdown and choose an item
Alternatively, you can view an onscreen PDF (or printed) report of all programmed menu items. Each item lists "Y" or "N" to label whether or not the item is set to be taxable. This is designed as a quick reference, refer back to the Menu Items and Pricing screen to view which tax rates, or special tax rates, are assigned.