question

idom-experts avatar image
idom-experts asked idom-experts commented

Taxes & Discounts

Hello, I recently purchased a new clover device for a restaurant and we're running into some difficulties with the setup. Here is the problem that we're trying to resolve:

We have a coupon that is supposed to be applied on the total amount of the order (after tax). However, when we use a discount, the tax is removed from the discount.

For example, if line item for an order is $100 and tax rate is 10%, the total amount for the order is $110. Then, if the customer presents a $10 discount coupon the total collected should be $100. However, the device applies the $10 discount on the subtotal and then calculates the tax. As a result, the total for the order becomes $99 instead of $100.

Can anyone please provide suggestion on what can be done here? We've tries setting up an additional tender to support our need, but the process is cumbersome and error prone since I can't "lock down" the tender amounts.

I've tried reaching out to the Clover support team, but they weren't much help. Any help is greatly appreciated.?

TaxesDiscounts
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1 Answer

Jacob Abrams avatar image
Jacob Abrams answered idom-experts commented

It appears that Clover is performing the merchant discount tax calculation correctly at least as it should be in Ohio, New York and Connecticut. See:

http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/taxable_receipt.htm

http://www.cleveland.com/business/index.ssf/2012/02/should_you_pay_sales_tax_on_th.html

http://askdrs.ct.gov/scripts/drsrightnow.cfg/php.exe/enduser/std_adp.php?p_faqid=480

The discount is a price reduction so the subtotal is decreased and the tax is decreased. In your example $99 is the legally correct final total after the discount.

Can you confirm what state the merchant is operating in? It does not appear that Clover supports manufacturer rebates but that does not seem to the case you describe.

As a possible hack to support manufacturer rebates for now you could charge the customer the full amount and then separately credit the customer the refund amount. This would ensure they pay the full tax. It's annoying because it is two transactions for the customer. I'm not sure if you can get the two transactions to show up on the same Clover order but you might if you are writing your own application, take a look at https://github.com/clover/android-exa... for an example of how to start the payment. Instead of making a new order and passing the order total you would lookup the existing order and then start a credit using Intents.TRANSACTION_TYPE_CREDIT with your desired amount. I can't guarantee this will work, but if it does it will only work on Clover Mini/Mobile and not Station.

4 comments
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This is true for most part. However, taxes on orders with rebates and discounts offered by manufacturers need to be treated differently. Please refer to: http://blog.taxjar.com/sales-tax-discounts-coupons-promotions/

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Thanks Jacob for the quick response. The client that I'm working with is looking to implement manufacturer incentives. They also appear to fall into the "Two for One" category described under the "Special Promotions" section in the article above. Any workaround/solution ideas?

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I added a possible ugly hack above, but ultimately it looks like there is not a reasonably good solution at this time.

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Thanks Jacob. Another option that I thought of was to add an additional tender type for these discounts. Is there an option to quickly enter amounts rather than having someone type that in manually? Another side effect is that a second receipt is printed. Any way to better use this approach?

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