Some Organizations calculate Taxes on top of Fees, while others determine Taxes without considering Fees or Gratuities. Both options can be configured in the system settings.
Service Fee Exempt
If your Organization calculates Taxes against the raw taxable sale price of an item (subtotal) then you will want to ensure the Taxes in question are set up as Fee Exempt. If a Fee is applied to an item using a Fee Exempt Tax, the Fee is not included in Tax calculation for the Fee Exempt Tax.
Click on Settings
Under Organization, click on Taxes and Fees
Edit the Tax you would like to adjust using the pencil edit icon
Check the box that reads 'This tax is Fee Exempt'
Click Save
Taxes Inclusive of Fees
If your Organization calculates Taxes on top of the base price + any Fees/Gratuity. You will want to ensure the checkbox 'This tax is Fee Exempt' is unchecked in Settings.
Click on Settings
Under Organization, click on Taxes and Fees
Edit the Tax you would like to adjust using the pencil edit icon
Uncheck the box that reads 'This tax is Fee Exempt'
Click Save
