Understanding Tax Types in Meadow Admin: Standard vs. California Excise
In Meadow Admin, the tax configuration offers two primary types—Standard and California Excise—each serving distinct purposes in accordance with California excise tax regulations. Knowing how and when to use these settings ensures accurate tax calculations and compliance with state laws.
Overview of Tax Types
The Standard and California Excise tax settings determine how Meadow Admin applies taxes to transactions. Here’s a detailed breakdown:
Standard Tax Type: - The Standard setting does not apply tax to any associated order fees. - Use this setting where your jurisdiction does not require taxes on delivery or payment fees.
California Excise Tax Type: - Applies excise tax on fees included in the gross sales amount. - Designed for compliance with California laws, which mandate excise tax to be charged on gross cannabis sales, including associated fees.
Key Differences
Application to Fees: - Standard ignores delivery or payment fees when calculating tax. - California Excise includes these fees in tax calculations.
System Logic: - When selecting the California Excise option, Meadow Admin is programmed to scan for fees and apply the appropriate excise tax rate. - Standard skips this step entirely, applying tax only to the base sale amount.
Legal Compliance and System Behavior
The California Department of Tax and Fee Administration (CDTFA) requires excise tax to be charged on the gross sales amount, which includes fees. Hence, after regulatory updates (introduced post-2023), Meadow Admin’s California Excise setting ensures businesses stay compliant by automatically accounting for these fees when calculating excise tax.
When to Use Each Tax Type
California Excise: - Select this when operating under California law or in jurisdictions requiring compound taxation on gross sales, including order fees.
Standard: - Suitable for jurisdictions with simpler tax rules where fees are excluded from tax calculations.
By choosing the appropriate tax type in Meadow Admin, businesses can ensure accurate calculations and remain compliant with applicable state regulations.