New Tax Exemption Features

New Taxing Features

Item-level Tax Exemptions and Exclusions

Lavu POS now gives our merchants and restaurateurs the ability to grant or deny tax exemptions at the item level in addition to the ability to grant order-level tax exemptions using order types or tax exemptions. This feature will help restaurants owners and operators to be flexible in how they apply tax exemptions.

Why do I need to apply tax exemptions at the item level?

Some states have interesting tax laws around the food and beverage industry and those tax laws vary by how the food is prepared or where it is eaten. Here are some examples that our customers have let us know about:

  • Raw fish can be sold untaxed. Cooked fish must always be taxed.
  • Chocolate eaten in the restaurant must be taxed, but is not taxed if the customer takes it to go.
  • Soda must always have a tax, even if the rest of the order is exempt from taxation.

Lavu’s other tax exemption tools apply to the whole order. Which means, for example, if I were to grant a tax exemption for a public school catering event in a state that required that sodas always be charged, I would have to ring in two different orders: a tax-exempt food order and a taxed soda order. Both of these orders would need to be paid out separately. You can probably see how this isn’t the best fit for owners and operators with these sort of tax laws.

What does this mean for my Lavu account?

There are a couple of different ways to handle your item-level tax exemptions. You can:

  • Assign tax exemption at the menu item-level.
  • Set an item to never be tax exempt, even if the remainder of the order is exempt.

Setting Tax Exemptions at the Item Level

Step 1: Order Types

You will need to begin by creating Tax exempt order types in the control panel settings. Use this linked article if you need some guidance. Feel free to get creative with the names of these order types. The example below has a tax-exempt order type for ‘Carry Out’ and for ‘Untaxed’. You can label these however you would like.

Once you have created the tax-exempt Order Types:

  1. Check the box next to Allow order types to be used as a forced modifier
  2. Click the SAVE button 

ordertype.png

You are now ready to use these order types as a forced modifier in order to have the option to mark an item as a tax-exempt while still taxing the other items on the order

Step 2: Forced Modifier List

Next, you need to build a modifier list to hold the non-taxed order types. You can use the tax exemption modifiers alongside other forced modifiers that apply to the item or you can build a tax exemption list and the use a Forced Modifier Group to combine it with other applicable forced modifiers.

  1. Navigate to the Forced Modifiers in the Menu (Menu > Forced Modifiers)
  2. Click the + ADD MOD LIST at the bottom of the screen
  3. Name the Forced Modifier group using the blank text box at the top left of the box (e.g. ‘Tax Choices’ or ‘Tax Exemptions’)
  4. Click the + ADD ORDER TYPE CHOICE button
  5. Select a tax exempt order type from the Select Order Type dropdown
  6. Repeat steps 4-5 until all of your tax exemption (and non-exemption) options are added to the list
  7. Click SAVE

taxfm.png

You can continue to add regular forced modifiers to this list using the + ADD CHOICE button to expand the list. For example, I could have my two tax exemptions in the same list as my salad dressing choices for ordering a salad.

You can also use this list as a stand alone if you do not have any other forced modifier choices that need to be made.

Finally, you can use a modifier group to combine this list with other lists for the item.

Step 3: Associating Tax Exemption with the Category or Item

The next step in this process is to associate the modifier list or group (whichever you are using) with the appropriate menu category or item. You will want to use the modifier at the category level if everything in the item should have the option to be tax exempt. You will want to use the item at the item level if you only have one or two items in the category that should have tax exemption options.

First, navigate to Menu Items.

Category Level

Select the forced modifier list you just created from the Forced Modifier dropdown at the category level and then click SAVE.

categoryfm.png

Menu Item Level

Select the forced modifier list you just created from the Forced Modifier dropdown at the item level and then click SAVE.

itemdeets.png

Your item level tax exemptions are now ready to use in the app. Just open it up and reload your settings to test the feature.

Excluding Items from Tax Exemptions

You are now also able to exclude items from tax exemptions that are applied at the check level. For example, let’s say you have a local law that prohibits tax exemptions on alcoholic beverages. You can exclude those items from tax exemption using this new feature.

Category Level Exemptions

  1. Navigate to Menu > Menu Items
  2. Click on the CATEGORY DETAILS
  3. Select No from the Allow Tax Exemption dropdown (the default setting is Yes)
  4. Click APPLY at the bottom of the details box
  5. Click SAVE in the main Menu Items page
  6. Reload settings in your app

Item Level Exemptions

  1. Navigate to Menu > Menu Items
  2. Click on the item DETAILS
  3. Select No from the Allow Tax Exemption dropdown (the default setting is Category Default)
  1. Click APPLY at the bottom of the details box
  2. Click SAVE in the main Menu Items page
  3. Reload settings in your app





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