---
title: "Charging Sales Tax"
description: "Taxation must be enabled in order to apply sales tax to package purchases and winning bids. To enable taxation go to Setup > Taxation and chek the box to Tax Packages. Choose the correct method to Ta…"
url: "https://help.aesauctions.com/article/a22ei6b6rm-charging-sales-tax"
category: "Event Setup"
updated_at: "2022-05-12T18:28:43Z"
---

# Charging Sales Tax

Taxation must be enabled in order to apply sales tax to package purchases and winning bids.

1. To enable taxation go to **Setup > Taxation** and chek the box to **Tax Packages**

Choose the correct method to **Tax By**

- Total bid up to value
- On value
- On total bid

And set the **Default Tax Rate**

![](https://files.helpdocs.io/va4glpkhhk/articles/a22ei6b6rm/1652379283961/image.png)

1. Next, you will need to enable taxation for specific item types, under **Setup > Item Pickup Types**

![](https://files.helpdocs.io/va4glpkhhk/articles/a22ei6b6rm/1652379542873/image.png)

Typically, sales tax is only applied to physical items, not certificates. However it is highly reccommended to consult with a tax advisor to determine the correct rates and applicable items for your state/municipality.

1. When creating new items and packages, you will see fields where you may fill in the appropriate **Taxable Percentage** and **Tax Rate.** While the tax rate will usually stay the same for all items/packages in any given event, the taxable percentage will change based on the items included in the package.

![](https://files.helpdocs.io/va4glpkhhk/articles/a22ei6b6rm/1652380018771/image.png)

**For example:**

- Item A is a **Certificate** and is valued at $100 (0% taxable)
- Item B is a **Physical Item** and is valued at $200 (100% taxable)

When Items A & B are combined into a package, that package will have combined value of $300 and is 66.67% taxable (200/300=0.6667).

If this package were to sell for $500 (greater than the item value) then based off of our intial setting of applying tax on **total bid up to value** (see step 1) we would see a tax amount of $17.62 for this package (300\*0.6667\*0.081).