Tennessee Tiered Tax Rates

gregaricangregarican Member Posts: 382 

So we will be adding a new shop in Nashville, TN soon. Tennessee has a challenging sales tax structure. Described here --> https://help.avalara.com/Frequently_Asked_Questions/Product_and_Service_Taxability_FAQ/How_is_the_Tennessee_Tiered_Tax_applied%3F.


Based on what I see in terms of configuring tax rates and tax classes in Lightspeed Retail, I don't see where this TN Tiered Tax is doable. A portion of an individual line item can be taxed at a certain rate, depending on its dollar amount. I was just in an online chat with a Lightspeed Retail support rep (Jan L.), who pointed me toward creating tax classes for these three tax tiers. And having the sales staff manually apply them as needed. But even then, these taxes would apply to the entire amount, not just a tiered portion.


Anyone out there using Lightspeed Retail in the state of Tennessee? If so, how do you workaround this?

9 comments

  • gregaricangregarican Member Posts: 382 

    From the support chat ...


    Chat started on 03 Jan 2020, 01:52 PM (GMT+0)

    (01:52:53)

    *** Greg Kujawa joined the chat ***

    (01:52:53)

    Greg Kujawa: We will be adding a new shop in Nashville, TN within a month. Wanted to confirm that Lightspeed Retail correctly calculates Tennessee Tiered Tax rates.

    (01:53:17)

    Greg Kujawa: Here's an article detailing how this tax is structured --> https://help.avalara.com/Frequently_Asked_Questions/Product_and_Service_Taxability_FAQ/How_is_the_Tennessee_Tiered_Tax_applied%3F

    (01:53:25)

    Customer Service: All of our agents are currently busy assisting other customers. Your question is important to us and we will be with you shortly!

    (01:54:31)

    *** Jan L. joined the chat ***

    (01:54:32)

    Jan L. : Hi, my name is Jan and I will be assisting you today.

    (01:54:37)

    Greg Kujawa: Sounds good.

    (01:54:59)

    Jan L. : let me double-check on that for you.

    (01:55:03)

    Jan L. : one moment please

    (01:55:03)

    Greg Kujawa: Thank you.

    (01:55:11)

    Jan L. : can I have your account ID please

    (01:55:16)

    Greg Kujawa: xxxxxx

    (01:55:28)

    Jan L. : Thanks, One moment please.

    (01:55:33)

    Greg Kujawa: Okay.

    (01:58:11)

    Jan L. : Thanks for waiting, as per checking, yes lightspeed will still be able to calculate your tax correctly as long as it's also set up correctly in the system.

    (01:59:01)

    Greg Kujawa: What do you mean "set up correctly in the system?" This is a manual configuration I'm assuming?

    (01:59:32)

    Jan L. : Yes, you will have to manually set tax rates on your account settings.

    (02:00:05)

    Greg Kujawa: If you can please forward me a link that explains this I'd appreciate it. That way we can refer to it when setting up the new shop. Thanks!

    (02:00:19)

    Jan L. : okay no problem.

    (02:00:51)

    Jan L. : https://retail-support.lightspeedhq.com/hc/en-us/articles/229131108-Setting-sales-taxes

    (02:01:43)

    Greg Kujawa: Actually while I was waiting I just looked in these settings. I don't see where I can set dollar thresholds for the tiers. For example, $1,601 to $3,200 for a single line item in the sale.

    (02:03:11)

    Greg Kujawa: If you click the link that I sent in the beginning of this thread, the tiers are explained. I don't see where this is doable in the Settings.

    (02:03:43)

    Jan L. : one moment. let me go back to that

    (02:03:57)

    Greg Kujawa: - State tax rate of 7% is applicable to all amounts. - Local tax rate between 2.25% and 2.75% is applicable between 0- $1,600 for all items. - State single article tax rate of 2.75% is applicable for all single items between $1,600-$3,200.

    (02:04:16)

    Greg Kujawa: It's tricky, so that's why I asked :)

    (02:08:23)

    Jan L. : Okay, so this is doable by using tax classes

    (02:08:24)

    Jan L. : https://retail-support.lightspeedhq.com/hc/en-us/articles/360033992054-Setting-tax-classes

    (02:09:36)

    Greg Kujawa: Hmmm, I don't see where this is defined by dollar thresholds. So I'm assuming that the salesperson would have to manually select the classes that might apply? And keeping in mind this tax applies to individual line items, as the Avalara link explains with concrete examples.

    (02:11:49)

    Jan L. : Indeed the system won't be able to automatically recognize the by dollar threshold, you will have to create the tax classes and tax rates then assign the tax class to the items individually depending on the item price.

    (02:12:01)

    Greg Kujawa: Gotcha. Thanks for your help!

    (02:12:08)

    Greg Kujawa: That's all I needed. Have a good weekend!

    (02:12:09)

    Jan L. : no problem

    (02:12:16)

    Jan L. : Perfect. Thanks for your time and have a great day.

    (02:12:23)

    *** Jan L. left the chat ***

    (02:37:48)

    *** Greg Kujawa left the chat ***

  • gregaricangregarican Member Posts: 382 

    I have learned that Avalara offers an integrated solution that supposedly works with Lightspeed Retail POS. Will find out more details on Monday.

  • gregaricangregarican Member Posts: 382 
    edited January 7

    So here is what I see...

    1) Avalara can integrate with Lightspeed Retail POS for handling TN Tiered Tax. They calculate things based on the line item particulars, then adding a new dummy line item that sums up the tax owed. The tax collected footer actually reflects zero tax collected, as the dummy line item provides the reporting detail. Here's a demo --> https://www.youtube.com/watch?v=8kCCt95RuYQ.

    2) Avalara can perform sales tax reporting directly to the state of TN. Which is nice.

    3) Avalara reportedly will be recognized as a formal Lightspeed partner toward the end of next month. We have been told that this means they will have expanded access to override the sales tax in Lightspeed Retail POS. Meaning no more dummy line item workaround explained in Point #1 above.


    Can anyone at Lightspeed speak to Point #3? I was under the impression that Lightspeed partners and customers alike share the same API endpoints. And currently there isn't a way to override sales tax via the API. Is Lightspeed planning to release a major update next month that will expose a new POS tax override endpoint or something?


    @Adrian Samuel or @Michael Carey can either of you please let me know about this? Our contract is up this summer, and with a new Nashville, TN shop opening up around the same time we have some decisions to make. Thanks so much!

  • gregaricangregarican Member Posts: 382 
  • gregaricangregarican Member Posts: 382 
    edited February 6

    So our Nashville, TN store is opening this coming Monday. How can we use Lightspeed Retail to tender sales transactions, in light to the tiered sales tax structure? @Adrian Samuel or @Michael Carey  I first posted this question over a month ago and didn't hear anything back as to a confirmed timetable. Any confirmation back about the Avalara partnered solution for this?

    Post edited by gregarican on
  • Adrian SamuelAdrian Samuel Moderator, Lightspeed Staff Posts: 597 moderator
    edited February 6

    Hey @gregarican,

    Sorry for the late response, this one slipped through the cracks!

    • So there is no major releases from the API and it is possible that there was some miscommunication between Avalara and yourself about what " expanded access to override the sales tax " access is.

    Changing the tax on a SaleLine has been available for a while and can be seen here:

    Request: https://api.lightspeedhq.com/API/Account/Sale/{saleID}/SaleLine/{SaleLineID}.json

    Payload: { "taxClassID":"3" }


    So you can use custom menus to speak to your custom web application and have it override the current tax menus on the sale.


    More info about custom menus can be seen here:

    https://developers.lightspeedhq.com/retail/tutorials/custombutton/

    https://retail-support.lightspeedhq.com/hc/en-us/articles/229518207-A-detailed-overview-of-custom-menus

    I hope this helps!

    Post edited by Adrian Samuel on

    Adrian Samuel

    API Integrations Consultant - Strategic Solutions

    Lightspeed HQ

  • gregaricangregarican Member Posts: 382 
    edited February 7

    Thanks for the feedback. So what was the nature of the Avalara partnership then, in terms of benefits for Lightspeed Retail clients?

    Appreciate the reference links and whatnot, but this only modifies SaleLine taxes against a single pre-defined taxClassID. Which (if I'm not mistaken) is static and cannot dynamically break out tiered taxes against:

    1) the entire line item amount.

    2) the line item amount between $0 and $1,600.

    3) the line item amount between $1,601 and $3,200.

    That's the crux of my question. How do your existing Lightspeed Retail clients properly collect and remit sales tax if they have nexus in the state of Tennessee? I still have yet to see a solution that would work. 🤔

  • gregaricangregarican Member Posts: 382 

    So this is still obviously an open question. If anyone out there is a Tennessee Lightspeed Retail client, how do you properly handle sales taxes? One of our head office staff visited the new store we're opening. He saw some retailers like Abercrombie & Fitch just took a flat 10% sales tax, and then refund the customer's credit card the difference that's calculated after the fact. He looked at his receipt and then checked his online statement a few days later and saw the credit. Pretty clunky and manual if you ask me, plus leaves potential legal exposure for over-collecting in the first place!

  • gregaricangregarican Member Posts: 382 

    Missed the boat on this one. We have decided to go with Shopify POS to cleanly handle what should be a simple solution --- properly collecting sales taxes. Shopify POS truly integrates with Avalara, so it will be a turn-key solution in this regard.


    Ironically enough, Shopify POS can't handle Canadian penny rounding either. But for us at least that's not an issue since we're US-based. 😁

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