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Tax settings: rates and profiles

Posted
Updated
ByThe Wax Stak Team

By the end of this article your invoices will calculate tax on their own: the right rate for the customer’s address, applied to the lines that are taxable, with one profile to fall back on.

Tax lives on the Taxes tab of Settings → Accounting, in two cards. A rate is one levy — a state, county or city percentage. A profile is the set of rates one place pays, keyed to its postal codes. Documents are priced by profile, never by a bare rate.

Create your rates

  1. In Tax Rates, click Add Rate.
  2. Give it a Rate Name (“CO State”), an optional Description, and the Rate as a percentage — 2.9 for 2.9%.
  3. Save. Repeat for every levy you collect; a rate can sit in as many profiles as you like.

Editing a rate later changes it for new work only: the app keeps the old version for every document already priced under it, so a rate change never rewrites an invoice you have sent.

Group them into profiles

  1. In Tax Profiles, click Add Profile.
  2. Give it a Profile Name (“Denver Metro”) and the Postal Codes it covers, comma-separated. A profile with no postal codes is only ever reached as the default.
  3. Tick the rates that apply. The Effective Rate shown is their sum — that is the percentage the customer pays.
  4. Switch on Default profile for new customers for exactly one profile: the one used when no postal code matches.
  5. Save.

Expand a profile in the list to read its postal codes, its linked rates and the effective rate.

How a document picks its rate

When a job, quote or invoice is priced, the app looks for a profile in this order and stops at the first hit:

  1. The postal code of the service address the work is at.
  2. The postal code of the customer’s billing address — or their primary address when there is no separate billing one.
  3. Your default profile.
  4. None — the document is taxed at 0%.

Invoices remember the profile they were priced under, so the tax report can split a year’s tax by jurisdiction even after a rate has changed.

Which lines are taxed

Tax applies to taxable lines only. Every service and product in your catalog has a Taxable switch, and a new line on a job, quote or invoice starts from it; the line’s own Taxable box can still be changed on that document without touching the catalog or any line already written. A document’s Taxable Subtotal is what the rate is applied to.

Retiring a rate or a profile

Use Deactivate rate or Deactivate profile on the row. A deactivated profile stops being offered for new work; every invoice already priced under it keeps resolving to it. A deactivated rate is removed from the profiles that offer it for new work; profiles already pinned to it are unaffected.

Good to know

  • QuickBooks. On the Business plan with QuickBooks connected, each profile is matched to the QuickBooks tax code it files under, so both systems split tax the same way — see Connect QuickBooks Online.
  • A rate typed by hand on an invoice is allowed, but an invoice whose rate matches no profile is not attributed to any jurisdiction on the tax report.
  • Who. Changing rates and profiles needs the Admin role; Accounting can read them.

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