The excise tax will also compound local taxes and apply to any fees on an order (such as delivery or payment fees).

The excise tax continues to be compounded by sales tax.

Read more about the change here.

The excise tax is NOT 15% of the retail selling price unless the retailer produced and/or distributed that product (in a non-arm's length transaction).

The easiest way to calculate and pay the correct excise tax amount is to include it in your product prices to reflect the cost of the tax.

You can see the exact excise on the Orders report, Line Items tab, in the column labeled "Package Line CA Excise." This is calculated using the cost entered on the purchase order for the package(s) in the order.

If you need to remove the 26.25% of wholesale cost excise calculation (for example for accessories or products you manufacture), click the purple button next to the excise field to edit/remove the automatically calculated amount.

The taxable amount also includes any fees from the distributor, such as delivery fees. If you bought the products from a distributor, you will need to give them 15% of [(wholesale cost of goods sold) + (75% of the wholesale cost of goods plus fees)] to cover the tax, and they will pay it to the State.

In order to tax certain products at non-arm's length rate (15% of retail sales price), create one or more categories for these products, and then create a non-arm's length excise tax in Settings that only applies to those categories.

To set up pass through excise taxes that are added to the order total based on the product's wholesale cost, follow these instructions.

Excise taxes (whether calculated on the package level or pass through), are shown on the Orders, Taxes and Purchase Orders reports.
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