SellTreez: How Can I Reconcile My Net Sales Amount in My Product Summary Report and My Tax Report?

Note: You can check your tax configurations here - Configurations > Config Page > Taxes > Point of Sale Tax Set Up

Question: 

How do I reconcile the net sales amount in my Product Summary Report with the net sales amount in my Tax Report?

Answer: 

First it is important to understand that the net sales amount in the Product Summary Report reflects all sales collected while the net sales amounts shown in the Tax Report automatically accounts for tax exemptions depending on how that tax was configured. 

In California, Medical-MMID patients are exempt from sales tax on cannabis products. Certain product categories like merchandise would also typically be exempt from cannabis taxes and the non-inventory category is completely tax exempt. If a tax is configured to compound on another tax, the taxable amount in the Tax Report will include other tax(es) collected. 

For the purpose of remitting taxes, we recommend referring to the Tax Report including its CSV export which contains all sales and tax details required to calculate the amounts to back out from the overall net sales and tie out the taxes charged shown in this report.

As an example on how the Tax Report calculates sales tax; using the Tax Report CSV export, the overall net sales can be verified by summing the Net Sales in column N (the Product Summary Report will show the same net sales). To arrive at the sales tax net sales amount shown in the Tax Report, deduct any net sales where sales tax does not apply due to exemptions. 

• This includes non-inventory sales which are non-taxable (‘Product Type’ column = ‘NON-INV’). 
• In California, Medical-MMID cannabis sales are also sales tax exempt (‘Customer Type’ column = ‘MEDICAL-MMID’ except where ‘Product Type’ /= ‘MERCH’ or ‘NON-INV’).  
• After deducting the non-inventory net sales and MMID cannabis net sales, this should match the net sales for sales tax shown in the Tax Report. 
• Next, the Tax Report’s taxable amount accounts for compounding taxes. For example, sales tax may apply to a local or state excise tax. So the sales tax taxable amount would include these taxes collected.   

Always check the POS tax set up to confirm how your compounding tax layers are configured. To calculate the sales taxable amount, add the taxes charged that compound on top of the sales tax to this net sales amount.

• In California, the local and/or state cannabis tax collected on MMID cannabis sales must also be deducted because sales tax would not compound on them (filter for ‘Customer Type’ column = ‘MEDICAL-MMID’, ‘Product Type’ /= ‘MERCH’, ‘NON-INV’, and sum the applicable cannabis taxes charged). 
• After adding the total taxes charged that compound on top of the sales tax to the net sales, and if in CA deducting the MMID cannabis taxes, this amount should equal the Taxable Amount shown in the Tax Report for sales tax.

For dynamic sales tax or sales tax amounts collected by delivery city, refer to the Tax Report in the portal by expanding the Sales Tax type.”