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How do contract level discounts impact taxes?

A quick view at how discounts impact the tax charged on your items.

Jake Scotto avatar
Written by Jake Scotto
Updated over 2 months ago

Taxes in Goodshuffle Pro are calculated per line item - this enables you to have multiple tax types on a project, such as an Admissions Tax and a Sales Tax, and have each tax applied to all items or, only some items (such as only your products, and NOT your services).

Let's take a look at how Discounts affect your taxes.

Example #1

On a project, I have a few items - each with a 5% tax.

The subtotal for this project is $600, and with a 5% tax per item, the total is $630.

Let's say I apply a contract level discount of $150.

You can see that the tax on the project was also reduced, from $30 down to $22.50.

Goodshuffle Pro applies a percentage of a contract level discount to each item on the order.

In this case, a $150 discount is 25% of the project's subtotal (150/600 = 25%).

With this 25% discount, my $100 item is now taxed as a $75 item, my $200 item is now taxed as a $150 item, etc.

Tax is now calculated on the new values of these items ($75.00 x 5% Tax, 150 x 5%, etc).

Example #2

On a project, I have a few items - each with a 5% tax. My $100 item has been discounted 100% at the line item, not contract, level.

The subtotal for this order is then $500, and with a 5% tax, the total is $525.

I'm going to apply the same $150 discount to this order at the contract level.

You can see that the tax on the project was also reduced, from $22.50 down to $17.50.

Similar to example #1, Goodshuffle Pro applies a percentage of a contract level discount to each item on the order based off of the subtotal after the discounted line item.

In this example, a $150 discount is 30% of the order excluding the item that was discounted 100% (150/500 = 30%).

With this 30% discount, my $300 item is taxed as a $200 item, etc.

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