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Should my item costs include sales taxes?
Should my item costs include sales taxes?

No, your item costs should be based on the pre-tax prices from your distributors / suppliers

Nick Neale avatar
Written by Nick Neale
Updated over a week ago

No, when initially adding your item costs or updating them based on your latest invoice, it should be the pre-tax price from the distributor.

This is because the prices of the menu items in your POS system do not include taxes (sales taxes are not revenue). If you apply taxes to the cost of your items, this will make your cost percentages on your menu items appear higher than they actually are.

If needed for accounting purposes, you can add an additional charge to your invoices for the amount of the sales taxes:

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