# Tax Calculations

Development Team -

rezStream Cloud calculates each individual tax on each item independently. This may result in a different value than you would see if you calculate the tax on the entire total.

Here are some examples to review:

POS Example:

We have a candy bar that is sold for \$1.00 and there is a 12.4% sales tax on that candy bar. If we sell one candy bar the total would be \$1.124, which would round to \$1.12. If we sold two candy bars the total would be \$2.248 which would round to \$2.25. This all seems simple so far, but now what happens if we sell a two candy bars to two different people? Well in that case we sell each candy bar for \$1.12 for a total of \$2.24. (The same would happen if you sold two different types of candy bars for \$1.00 each.) This means that when we look at a report for the days taxes we will see only 24¢ collected for a 12.4% tax on \$2.00, when it would appear that we should have collected 25¢.

Lodging Example:

Let's say we only charge \$1.00 per night for a room and also have the same tax of 12.4%. This would result in \$1.12 being charged each night. A three night reservation would result in a total collected of \$3.36, while a 12.4% tax on \$3.00 directly would result in a total of \$3.37.