How do I handle taxes and surcharges?
Short answer
Set your applicable tax rates and any recurring surcharges, like a fuel or environmental fee, once in your pricing setup, then apply them automatically to every quote and invoice based on the job type or location. TactStack calculates the correct total so nobody has to remember to add a fee by hand or explain a missing tax line after the fact.
Before you start
- The correct tax rate for each location or jurisdiction you serve.
- A list of recurring surcharges, like fuel or environmental fees.
- Clarity on which job types or products the surcharges apply to.
- Whether taxes apply to labor, materials, or both in your area.
Step by step
- 1
Confirm your actual tax obligations first
Check with your accountant or state guidance on which services and materials are taxable in each jurisdiction you operate in.
Getting this wrong in setup means every quote afterward carries the same mistake.
- 2
Set tax rates by location
Enter the correct rate for each city, county, or state you serve rather than using a single flat rate everywhere.
A single rate applied company-wide overcharges customers in some areas and undercharges in others.
- 3
Define recurring surcharges separately from tax
Set up fuel, environmental, or hazardous material fees as their own line item type distinct from tax.
Keeping surcharges separate makes them easy to update without touching tax configuration.
- 4
Attach surcharges to the job types that need them
Apply a fuel surcharge only to service calls, for example, rather than to every line item on every quote.
A surcharge applied everywhere shows up on jobs it was never meant for and invites questions.
- 5
Confirm taxes calculate on the right base
Check whether tax should apply to materials only, labor only, or both, based on your jurisdiction's rules.
Taxing the wrong base is a quiet compliance problem that only surfaces during an audit.
- 6
Test a quote in each jurisdiction you serve
Run a sample quote for a customer in each tax region to confirm the rate and surcharge calculate correctly.
One bad quote in front of a customer is a worse way to find a setup error than a test run.
- 7
Review rates periodically
Check tax rates and surcharge amounts on a set schedule, since rates change and fuel costs fluctuate.
A rate set correctly a year ago can be wrong today without anyone noticing.
What good looks like
- Every quote and invoice reflects accurate tax and surcharge amounts automatically.
- Reps never have to remember to add a fee by hand.
- Customers see fees itemized clearly instead of buried in a lump sum.
- Compliance risk drops because rates are set once and applied consistently.
Common mistakes
The ways this goes wrong in money, and what to do instead.
Using one flat tax rate for every job›
A single company-wide rate overcharges or undercharges customers depending on their actual jurisdiction.
Do this instead: Set tax rates by location so each job calculates the correct amount.
Mixing surcharges into the tax line›
Combining a fuel fee with sales tax makes both harder to update and confuses customers reading the invoice.
Do this instead: Set up surcharges as their own separate line item type.
Applying a surcharge to every job type›
A fuel surcharge added to jobs where it never should have applied creates avoidable customer disputes.
Do this instead: Attach each surcharge only to the specific job types it is meant for.
Never revisiting rates after initial setup›
Tax rates and fuel costs change, and a rate configured once can quietly go stale for months.
Do this instead: Review tax and surcharge settings on a recurring schedule.
Frequently asked
6 questions about handle taxes and surchargesRelated guides
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