A Tax Rate in qoda.ly represents a percentage value used to calculate applicable sales taxes on customer bills. qoda.ly offers a flexible tax configuration system that allows you to set up multiple Tax Rates and define how they are applied to your items. In Europe you will usually apply a single Tax rate to an item (VAT, at different rates), while in the USA it is common to apply multiple Tax rates.

How Tax Rates work

• Location-based foundation: Tax Rates can be established at the location level. These default rates are then inherited by all Items within that location unless overridden at a lower level.
• Inheritance chain: qoda.ly uses a cascading inheritance structure for Tax Rates. Locations set the base, but menus, Menu groups, and even individual items can all override the inherited Tax Rate and specify their own.
• Overriding inheritance: at any point within this chain, you can choose to disable inheritance and set a more specific Tax Rate.
• Service Type specificity: Tax Rates can be associated with a specific “service type” (e.g., Dine-in, Takeout, Delivery). This allows you to accurately charge taxes in accordance with local regulations, which might vary based on how the order is fulfilled.
• Automated calculation: When a bill is generated, qoda.ly considers the inheritance hierarchy, applicable service type, and applies the appropriate Tax Rate(s) to each Menu Item based on your configuration.

Best practices

• Stay compliant: Ensure you set up Tax Rates in qoda.ly according to the regulations in your operating area. Consult a tax professional if needed.
• Leverage inheritance: The inheritance structure can streamline tax configuration, especially for Menus with many Items in the same tax bracket.
• Utilize Service types: Make full use of the “service type” property to accurately apply different tax rates based on whether food is consumed on-premises or taken to-go.
• Reporting & Analysis: Use qoda.ly’s reporting tools to track and analyze tax collection data broken down by service type.

Need help? Contact qoda.ly Support for personalized assistance.