Handling US sales tax in a trade POS: what actually matters
US sales tax is not VAT with a different name. It is charged at the point of sale, varies by state and locality, and often does not apply to wholesale transactions at all. Your POS should reflect that reality — simply.
How sales tax differs from VAT
VAT is charged at each stage of the chain and reclaimed by businesses; US sales tax is generally charged once, to the end consumer. Many wholesale sales to resellers are exempt when the buyer holds a valid resale certificate — which is why, for a wholesale operation, the honest setup is often no tax line at all rather than a tax engine.
What your POS should do
- Carry one flat rate and one label, set by you — the setting’s own US example is $ / 0% / Tax / United States, which suits a wholesale operation whose sales are exempt; a business that does charge a rate sets that rate instead.
- Call the tax line what your market calls it — a Tax label, not a hard-coded “VAT”.
- Quote in dollars — set the currency symbol to $ and the whole POS, quotes and PDFs speak USD.
To be clear about the shape of the feature: it is one team-wide rate and label, not state-by-state automatic calculation, and not per-order tax switching. If your obligations genuinely span many states at retail, you need dedicated tax software; for a single wholesale operation, one setting is the point.
What your POS should not do
Decide your obligations for you. Whether you owe sales tax in a given state depends on nexus rules that vary by state and change over time. Speak to a US tax adviser and check the relevant state department of revenue’s guidance — and the IRS for federal questions. Configure the POS to match what they tell you, not the other way round.
Trade Order POS now has a team-wide Locale setting — currency symbol, tax rate, tax label and default country — so a US operation runs in dollars with a Tax line, with orders landing straight in Linnworks. Find out more →
Questions, or want a tool we don't have yet? Email hello@grafto.co.uk — a real person replies.