Tax types

With FareHarbor, you have the ability to create several tax types, which can be applied to your company in various ways. You can apply tax types to everything you offer, including specific items and individual price lines.

During the Onboarding process, we’ll verify your company’s tax types, including your most general tax rate, as well as any other tax types your company may have, such as item-specific taxes, alcohol taxes, harbor taxes, or others. We’ll make sure everything is set up correctly.

You can always adjust your tax types later. Additionally, you can determine whether or not different parts of your book form should be taxed.

There are a few steps to use tax types, which are covered below.

Creating tax types

First, we will create a tax type. To create a new tax type:

1. Go to your company’s Settings > Bank & Payments > Tax.
2. Select +New tax type.
3. Input a name for your tax type.
4. Optional: Input an SKU (SKUs are internal names for fields on your Dashboard that won’t show to customers; read more about SKUs here).
5. Select between “Percentage tax” or “Flat tax” from the dropdown (Percentage tax calculates a tax amount based on a percentage of the price while Flat tax is a set dollar amount of tax applied to a price line, no matter the price).
6. Input the desired tax amount.
7. Click Create.

Your new tax type is now ready to use. You can add this tax type to any part of your book form that is taxable.

You can always edit your tax type by going to the Tax tab in your Bank & Payments settings, selecting the Edit button next to the tax type you would like to change, entering the new information, and selecting Save.

Now that you’ve created a tax type, continue reading below to learn how to add it to your book form.

Using tax types

Adding a tax type to the base sheet

FareHarbor uses price sheets to cascade prices throughout the Dashboard. The highest sheet level that taxes can be set on is the base sheet. The tax types on the base sheet are the default tax rates applied to every taxable part of your book form (such as customer prices and priced custom fields).

To add a tax type to the base sheet:

1. Go to Settings > Price Sheets, then select Base.

2. Select the highlighted cell in the “Tax” column.

   

3. Set the dropdown to On.
4. Locate the tax type you would like to set on the base sheet, and set its dropdown to On.
5. Select Save

Your tax type has now been added to the base sheet.

Adding a tax type to an item

Because an item’s price sheet will inherit information from the base sheet, an item’s tax type is the same as the tax type on the base sheet by default. However, you can set a different tax type on individual items, if needed.

To set a different tax type for an item:

1. Create a new tax type with the desired rate by following the steps above.
2. Go to Items and select the desired item.
3. Navigate to Options & Prices.
4. In the row with your item’s title (where it says “Item price line”), select the cell in the Tax column.
5. Set your tax types as desired.

6. Select Save.

   

Untaxed items, customer types, or custom fields

Any part of your book form that can be priced (such as customer types or custom fields) can be taxed or untaxed. By default, they are taxed using the next highest sheet’s tax type.

You can adjust this setting by navigating to the Tax column on the price sheet for the item, customer type, or custom field you want to change, then selecting the cell in the Tax column. By default, these price lines will inherit any tax settings from price sheets above them, but you can change those settings to whichever tax type setup you prefer.

Depending on your Dashboard’s settings, you may also be able to manage how percentage custom fields are calculating their associated taxes. If you have questions about managing these, or if you’d like to enable this ability, feel free to reach out to our Support team.

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Tax types in use

Best practices for multi-tax

• If there is only one tax on the Dashboard:
  • Don’t need to change name or add SKU
• If there is more than one tax type on the Dashboard:
  • Be specific with the names of the taxes (i.e “Activity Tax” and “Sales Tax”)
• On the base sheet: turn on the highest level tax rate (i.e. the most used tax rate) and keep all other ones off
• To change the tax type of a Custom Field / Customer Type, go to:
  • Settings > Custom Fields OR
  • Settings > Customer Types
• If a tax rate changes, add a new tax type (do NOT just edit the existing tax type)
  • i.e. – Taxes increase from 10% to 11%*

• If you are using ‘flat rate’ tax and it only needs to be applied once per booking:

  • Create a required regular dropdown custom field with 2 options:
    • Text to show in dropdown: inside the parenthesis ( ‍ ) | price leave as inherit | tax: Change and turn on the flat tax
    • Text to show in dropdown: “Remove flat tax” | price leave as inherit | tax: leave as inherit | Visibility: hide when booking is checked

  • Add to whole booking level of item.

    

  • For examples, see here for the custom field setup, and see here for how this setup works on an item.

Removing flat taxes

We do not allow users to set a negative flat tax because of how we account for subzero numbers on bookings. A negative flat tax is automatically set to zero, and does not calculate as negative.

A few notes on this:

• A negative price with a flat tax on it’s price line will apply the inverse of the flat tax (i.e. if a price line has -$50, and the flat tax is set to 7.5%, the price line will subtract $50 and remove 7.5% from the line).
• There is an option that allows a flat tax to be set to on or off on the price line level,

Multi-tax and customer types

To tax specific amounts within a customer type:

1. Price customer type to what the client wants to show their clients.
2. Remove price of the customer type with a negative quantity dropdown (1-to-1).
3. Add back the pricing with positive quantity dropdowns with the correct taxes associated.

Example

For a $100 customer type, $70 of the $100 is for the actual activity, which gets taxed at 10% and $30 of the $100 is a liquor tax, which gets taxed at 5%.

How to set this up:

1. Price the customer type at $100 with the highest level tax type (the “Dashboard tax”).
2. Add a negative quantity dropdown that subtracts $100 with the Dashboard tax.
3. Add a positive quantity dropdown that adds $70 with the Dashboard tax.
4. Add a positive quantity dropdown that adds $30 with a liquor tax type.

See an example of this setup on this demo Dashboard and this [4.0 OB Doc]:(https://docs.google.com/spreadsheets/d/1_oqPosheCSc7cCi9JGlQgCapMetj2GvHFr39ApqE9pE/edit?usp=sharing).

Legacy bookings and reporting on taxes

Note that with the release of multi-tax, bookings created before the release of tax types will have tax that does not correspond to tax types until the booking is repriced.

These older bookings will count the previous tax in the “Total tax” column, but will not be shown in the “Tax by type” column.

Note: If Aggregate tax is enabled in the dashboard, you will not see the “Tax Paid By Type” option in reports.