Promo Codes: Apply Taxes Before or After Discount
About
We’ve added a toggle on each promo code that lets you choose how sales tax is calculated relative to the discount. You can now apply promo discounts before taxes (traditional) or after taxes (taxes calculated on the pre-discount subtotal).
This setting is per-promo code.
How it works
Option A — Discount before tax (toggle OFF)
- Taxable amount = subtotal after discount
- Common/legacy behavior in many stores
Example (8% tax, 10% off, $100 subtotal):
Subtotal $100 → Discount $10 → Tax on $90 = $7.20 → Total $97.20
Option B — Tax before discount (toggle ON)
- Taxable amount = subtotal before discount
- Discount does not reduce the tax base
- The discount is taken from the pre-tax subtotal (not from the tax)
Example (8% tax, 10% off, $100 subtotal):
Tax on $100 = $8.00 → Discount $10 → Total $98.00
(Note the tax remains $8.00 because it was calculated before the discount.)
Shipping and other charges continue to follow your existing tax rules. This toggle affects how the order discount interacts with the item subtotal tax base.
Where to find it
From your Spirit Sale dashboard go to Settings → Promotions
Create or edit a promo code.
Toggle “CALCULATE TAX BEFORE APPLYING”:
OFF → Discount before tax (reduces taxable base).
ON → Tax before discount (discount does not reduce tax).
Click the green Update button.
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