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How to Set Up a New Tax Rate

Written by Sivan Salem
Updated today

Taxes 2.0 introduces a redesigned tax configuration area where you can create multiple tax rates, organize them by category, and control exactly how they apply — including to tax-exempt customers.

Note: Tax rate setup is done in the Business Manager. You'll need admin access to manage account-level settings.

How to create a new tax rate

  1. In the Business Manager, go to Admin → Account → Taxes.

  2. Click +New Tax Rate.

  3. Enter a name for the tax rate (e.g., "Florida Dry Cleaning Tax" or "NY State Sales Tax").

  4. Enter the percentage (e.g., 2%).

  5. Optionally, assign a Tax Category to keep your tax rates organized. You can select an existing category or create a new one.

  6. Review the "Apply to all customers, including tax-exempt customers" toggle:

    • Leave this off for standard tax rates. Tax-exempt customers will be excluded from this tax.

    • Turn this on only if the tax legally applies to all customers regardless of their tax-exempt status — for example, Florida's 2% dry cleaning gross receipts tax, which applies even to nonprofits and government entities.

  7. Click Save. Your new tax rate will appear in the tax rates list.

Tip: Once a tax rate is saved, it needs to be assigned to a location before it can be applied to any services or products. See How to assign multiple tax rates to a location, product, and service for next steps.

FAQs

What is a tax category? Tax categories are labels you can use to organize your tax rates (e.g., "State Taxes," "Excise Taxes"). They're for organizational purposes only and don't affect how the tax is calculated.

When should I turn on "Apply to all customers, including tax-exempt customers"? Only when a specific tax legally requires it — for example, certain state-mandated excise taxes that apply to all customers regardless of tax-exempt status. When in doubt, leave this toggle off and check with your accountant or the relevant tax authority.

Can I edit a tax rate after saving it? Yes. Click on any tax rate in the list to open and edit its details in the side panel.

Can I delete a tax rate? Not if it's currently assigned to a location. To effectively disable a tax rate, unassign it from all locations — it will no longer appear as an option when configuring services or products.

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