Some states and localities require "stacking" (or "compounding") tax rates, which are applied in a specific order and calculated based on the amount that includes the previous tax(es).
Examples
If you have a $100 sale with a 10% state tax and a 6% county tax that are not stacked, both taxes are calculated on the $100 subtotal:
| State tax | County tax | Total tax |
| $100 x .10 = $10.00 | $100 x .06 = $6.00 | $10.00 = $6.00 = $16.00 |
In contrast, if the same sale has the 10% tax applied first and the 6% tax stacked on top, the first tax is calculated on the $100 subtotal, and the second is calculated on the $100 subtotal plus the first tax ($110):
| State tax | County tax | Total tax |
| $100 x .10 = $10.00 | $110 x .06 = $6.60 | $10.00 = $6.60 = $16.60 |
It's important to stack the taxes in the correct order because although the order doesn't affect the total tax amount, it does affect the amounts of the individual taxes:
| County tax | State tax | Total tax |
| $100 x .06 = $6.00 | $106 x .10 = $10.60 | $10.60 = $6.00 = $16.60 |
Create stacking tax rates
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Create the tax rate that comes first in the stacking order. Be sure to choose the following:
- Stacks on other rates: Yes
- Stacking order: 1
- Repeat the same steps to create the tax that comes next in the stacking order, setting the stacking order to 2, and so on.
- Once you've added stacking taxes, each tax rate's stacking order is shown in the Tax rates section.
Dutchie does not provide tax advice. Merchants using Dutchie products should determine their tax responsibilities by utilizing their own tax advisors. Dutchie provides tools that calculate taxes in many optional configurations. Dutchie does not and cannot ensure that tax calculations in Dutchie products are correctly configured. Configuring taxes is exclusively the responsibility of the merchant.