This guide will be removed on April 29, 2022. Please use our new, easier-to-use Toast technical documentation site. All updated content is on the new site.

Understanding state tax tables

Before creating a tax table rate, you should understand the state tax table's tax brackets and its tax pattern.

The following is an example of a state tax table.

Example of a state tax table.

Tax Brackets: Each tax bracket in the table consists of an Amount of Sale range and a Tax amount for any sale that falls within the range. For example, the tax bracket with an Amount of Sale range from $4.10 to $4.16 has a Tax amount of $0.25. A meal whose items have a subtotal of $4.12 has a tax amount of $0.25 (for a total of $4.37 for the check); a meal with a subtotal of $4.15 also has a tax amount of $0.25 (for a total of $4.40 for the check).

Note the following about any tax bracket:

  • The lower (from) amount of the sales range is always one penny greater than the upper (to) amount of the previous tax bracket.

  • The tax amount for the bracket is always one penny greater than the tax amount of the previous tax bracket.

Therefore, when you configure a tax bracket for your Toast tax table rate, you do not enter the lower amount of the tax bracket nor the tax amount for the bracket (because the Toast platform can calculate those amounts from the previous bracket). Instead, you enter only the upper sales range of the tax bracket.

Also notice that this example tax table does not have a tax bracket for an Amount of Sale range of $0.00 to $0.09 (which would be a tax amount of $0.00). However, when you configure your Toast tax table rate, you have to include the non-tax (.00 to .09) bracket.

Tax Pattern: One thing that the state tax table does not show you is the tax pattern, which you must figure out for yourself. You begin by calculating the price difference between the start and end prices in each Amount of Sale range. For example, the range in the first tax bracket is from .10 to .16, which is a price difference of .06. The next tax bracket is from .17 to 33 (a price difference of .16) and so on.

The tax pattern for our example state tax table is as follows:

Example of a tax pattern.

This example state tax table has a six-bracket tax pattern (from .06 to .25). Note the following about the tax pattern for this specific tax table:

  • After the first occurrence of the tax pattern, the pattern will be repeated for the rest of the tax table.

  • The tax bracket with a price difference of .06 will always begin an instance of a tax pattern group.

  • The non-tax (.00 to .09) bracket is not considered part of the tax pattern. Depending on the state tax table you are using, you may have several of these non-pattern tax brackets, all of which will appear before the first instance of a pattern group.

When you configure your Tax Table tax rate, you will have to identify the tax pattern and also specify which tax bracket begins the tax pattern.