ScheduleDrop can now calculate sales tax automatically based on the property address on each booking. You set up your service areas, create a tax rate for them, and the correct tax is applied as soon as you enter an address in that area. You can also control whether tax applies to additional fees and specific expense categories, and track everything you've collected in your reports.
Tax rates vary by state, county, city, and even zip code, so check the rules for your area before setting this up.
Step 1: Create a service area
Sales tax is tied to service areas, so this needs to be set up first.
Go to Service Areas and click New Service Area.
Give it a name (for example, "Palm Beach County").
Select the state, then the county.
If you need to be more specific, you can also select cities or enter zip codes. You can create as many service areas as you need, each with its own tax rate.
Click Next.
Optionally, assign providers to the service area. This connects to your booking form so you know who services which areas.
Choose how existing bookings should be handled:
Only new bookings: the area's tax rate applies to bookings you create from now on.
Recalculate scheduled bookings: future bookings already scheduled in this area (including any that are no longer inside it) are updated to match the area's current rates.
Paid bookings and bookings where you set the taxes manually are never changed.
Step 2: Create a tax rate
Go to the Taxes section.
Make sure Collect Sales Tax is turned on. If you'd rather add sales tax manually, turn this off.
Click Add Tax Rate.
Enter a name (for example, "Palm Beach County Sales Tax") and the rate (for example, 7%).
Choose where it applies:
All Service Areas: applies everywhere that doesn't have a specific rate.
Specific Service Areas: applies only to the areas you select.
Set your additional fee and expense category options (explained below), or leave the defaults to tax the full amount.
Click Add Rate and choose whether to apply it to new bookings only or recalculate scheduled bookings.
Step 3: Create a booking
Go to Create Booking and build the booking as usual.
Enter the customer's address.
If the address falls inside a service area with a tax rate, the sales tax is added automatically.
Taxing additional fees
When editing a tax rate, you can control whether your additional fees (like a processing fee) are taxed.
All Additional Fees: tax is charged on the subtotal plus every additional fee, minus discounts. This includes fees you add later. For example, if your subtotal is $300 and you have a $5 fee, tax is charged on $305.
Specific Additional Fees: tax is charged on the subtotal plus only the fees you select, minus discounts. Use this if you have several fees and only some should be taxed.
If none of your additional fees should be taxed, select Specific Additional Fees, leave the list empty, and save.
Taxing only certain expense categories
Some industries are only required to charge tax on part of the job, such as the product or materials, and not the labor. This is common when you sell and install a product, like a water filtration system. The rules depend on your state, so confirm what applies to you.
Create an expense category for what needs to be taxed (for example, "Product Cost").
Open your tax rate and go to Expense Categories:
All Expense Categories: tax is charged on the full subtotal. This includes categories you add later.
Specific Expense Categories: tax is charged only on the amounts entered in the categories you select.
Select your category and save.
When you create a booking, click Edit in the expenses section on the right side and enter the amount. For example, if you enter $1,000 under Product Cost with a 7% rate, $70 in tax is charged on that $1,000 and the rest of the booking price isn't taxed.
Note: Expense amounts are currently entered manually on each booking. A future update will let you add them to your pricing rules so they load into the booking form automatically.
Tracking expenses and profit
Expense categories are also useful outside of sales tax. When you enter costs on a booking, like product cost or lead cost, ScheduleDrop shows your actual profit and profit margin on the job. This helps you quote accurately because you know exactly what you'll make.
Provider pay is already included in the calculation, so you don't need to add a separate labor expense.
Viewing sales tax in reports
Go to Booking Reports and open the Sales Tax section to see the tax collected on your bookings. Use this to check your numbers when paying sales tax to your state or county.
Need help?
If you have questions about setting up sales tax, reach out to us through the chat widget anytime.