Overview

In this article, we will show you how to configure a non-taxable fee on the item level, for situations such as CRV (California Redemption Value) charges on beverage bottles.

While this type of fee appears similar to tax, it is technically not taxable because businesses are not supposed to collect tax on top of another tax-like fee.

Use Case Example

Let’s imagine the following scenario:

• You are selling a bottle of soda (e.g., Coca-Cola)
• Item price: $3.29
• Sales tax: 10%
• CRV fee: $0.50 per item (non-taxable)

Your goal is to apply both tax and the fixed fee correctly during checkout and display them clearly on the receipt.

How to Configure It

1. Go to Tax Settings in your back office.
2. Create a New Tax Category that includes both your sales tax and the fixed fee.
3. Add a Sales Tax
   • Create the standard tax rate (e.g., 10%) as you normally would.
   • 
4. Add the Fixed Fee as a “Tax”
   • The system uses the tax engine to apply fixed fees, even if they are not technically taxes.
   • Create a new tax line and set the value as a fixed dollar amount (e.g., $0.50), not a percentage.
   • 
   • Resulting tax category configuration:
     
5. Assign This Tax Category
   • Apply the new tax category to the specific item (e.g., Coca-Cola).
   • 
6. Save Your Changes.

What Happens at Checkout

When a customer adds the item to the cart:

• The system calculates sales tax based on the item's base price (e.g., 10% of $3.29).
• The system adds a flat $0.50 fee per item, without applying tax to the fee.
• The customer sees two separate line items on the receipt:
  • One for the tax
  • One for the fee
    

This setup ensures full compliance while providing a clear breakdown of charges.