I'm trying to fine tune my sales tax calculations. I only charge 6% Kentucky sales tax on items that are shipped within Kentucky. I've noticed the sales tax is being calculated on the order total before discounts, but as far as I know, I only need to charge sales tax on the net purchase. Is there a way to fix the sales tax calculation in ECT?

Hi Sharon
Discounts should be applied after discounts as you correctly mention, but that has always been the case. Is it possible this is actually tax added to shipping that seems to be extra state tax on the products?

Vince

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There is no shipping on this order since it is a digital download.

Order Total: $8.00
Discounts: $3.50
State Tax - 6%: $0.48
Grand Total: $4.98

I'm looking at this order a little more closely and just noticed the discount is from loyalty points. Are they treated differently than a regular discount?

Hi Sharon
Yes, as loyalty points are really seen as a method of payment rather than as a discount.

Vince

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Is there a way to separate them when I import data into QuickBooks since the sales receipt download detail report just lump loyalty points and other discounts into the total discount field vs. a separating them?

I was doing some more research on how this is handled in my state of Kentucky. Rewards or loyalty credits given to a customer to reduce the amount they owe should not have Kentucky state sales tax applied to them. Is there a way to exempt loyalty credits from the sales tax charged in the shopping cart the same as shipping costs are taxed?

Hi Sharon
Now the weekend is over and my head is a bit clearer . . .
It seems this really is a bug and I've fixed it now and added the fix to the updater. Did you want me to update your website?

Vince

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Vince,
I should have said 'the way shipping costs are not taxed' with the setting in the includes file.

But thanks so much for making this fix. I really hadn't paid much attention to the sales tax calculation before, but QuickBooks has changed and does sales tax calculations automatically so my uploaded files often don't match what they've calculated when I balance my account and I'm having to keep 'fixing' things to balance.

If you could update my site that would be great. Do you still have login info for my site or do I need to create a new ftp login? Just bill me for what I owe you.

Hi Sharon
Yes, I still had the login and the site has been updated now. Please let me know if you still have any problems.

Vince

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Vince,
Thanks so very much for your quick service!

Hi Vince,
I've been watching orders come in since you made the fix and updated my site last month, but the cart is still calculating local sales tax before discounts instead of after. I had one this morning as follows:

Order Total: $7.00
Discounts: $1.20 (This was loyalty points.)
Sales Tax - 6% $0.42
Grand Total: $6.22

Could you look at this again?

Hi Sharon
I've been trying here every which way and it all seems to be ok. Can you let me know what the order id is where this is going wrong and I'll take a look.

Vince

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Order 58025 is the latest one.