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Tax configuration

FSM Navigator lets you set a default tax rate for your company, override it on individual invoices, and mark specific customers as tax-exempt — so every invoice shows the correct tax amount automatically.

Set a default tax rate

A default tax rate saves you from entering the same percentage on every invoice. This rate is applied automatically when you create a new invoice.

  1. Go to Settings → Invoice Settings.
  2. Find the Default Tax Rate field.
  3. Enter the tax percentage — for example, 8.25 for 8.25 %.
  4. Click Save.

From now on, every new invoice is pre-filled with your default rate. You can still change it on any individual invoice before sending.

Match your local rate

Enter the combined sales-tax rate for your primary service area. If you serve multiple jurisdictions, use the rate that applies to most of your jobs and override the rest per invoice.

Override tax on a single invoice

Sometimes a job is performed in a different city or state with a different rate.

  1. Open the invoice (in Draft or Generated status).
  2. Change the Tax rate field to the correct percentage.
  3. The tax amount and invoice total update automatically.
  4. Click Save.

The override applies only to that invoice — your default rate stays the same for future invoices.

Mark a customer as tax-exempt

Government agencies, nonprofits, and certain commercial accounts may be exempt from sales tax.

  1. Go to Customers and open the customer record.
  2. Enable the Tax Exempt toggle.
  3. Click Save.

When you create an invoice for a tax-exempt customer, the tax rate is automatically set to 0 % and a "Tax Exempt" label appears on the invoice.

Exemption certificates

FSM Navigator tracks the tax-exempt flag for convenience. You are responsible for collecting and retaining any required exemption certificates per your local tax authority.

How tax appears on invoices and PDFs

Tax is shown as a separate line between the subtotal and the total on both the on-screen invoice and the downloadable PDF.

Line Example
Subtotal $2,800.00
Tax (8.25 %) $231.00
Total $3,031.00

If the tax rate is 0 % — either because you set it that way or the customer is tax-exempt — the tax line still appears as $0.00 for transparency.

How tax is calculated

When you create an invoice, the tax amount is based on the rate you entered (or your default rate). When a customer pays online through Stripe Connect, Stripe may recalculate the tax based on the customer's billing address and the tax rules for that jurisdiction. The final tax shown on the receipt and recorded against the invoice reflects what Stripe actually collected. If you don't use Stripe Connect, the manual rate you entered is what's collected — there is no automatic adjustment.

For details on downloading and emailing invoices, see PDF & email.

Common tax configurations

Below are typical setups. Adjust percentages to match your actual jurisdiction.

Scenario Default rate Per-invoice action
Single state, one rate (e.g., 7 %) 7.00 None needed
Multi-state operations Rate for your home state Override for out-of-state jobs
Mixed taxable / exempt customers Your standard rate Exempt flag handles it automatically
Tax-free services only 0.00 Override when a taxable product is included

Example: multi-state service company

Summit Electrical operates in Texas (6.25 %) and Oklahoma (4.50 %). They set 6.25 % as the default because most jobs are in Texas. For Oklahoma jobs, the dispatcher changes the tax rate to 4.50 % on the invoice before sending.

Tips

  • Review your rate annually — sales-tax rates change. Update your default whenever your local rate is adjusted.
  • Check before sending — the tax rate is editable only while the invoice is in Draft or Generated status. Once sent, it cannot be changed.
  • Use notes for context — if a customer requires a specific tax reference or exemption number on the invoice, add it in the Notes field when creating the invoice.

Frequently asked questions

Can I set different default rates for different customers?

Not as a per-customer default. However, you can override the rate on each invoice, and tax-exempt customers automatically receive a 0 % rate.

Does the tax rate apply to discounts?

Tax is calculated on the subtotal after any discount is applied. For example, a $1,000 subtotal with a $100 discount and 8 % tax results in tax of $72.00 (8 % of $900).

Can I add multiple tax lines (e.g., state + county)?

FSM Navigator uses a single combined tax rate per invoice. Enter the total combined percentage — for example, 9.50 for 7 % state + 2.5 % county.

What if I need to change the tax on a sent invoice?

You cannot edit a sent invoice directly. Void the original invoice and create a corrected one with the right tax rate. See Invoice workflow for details on voiding.

Is the tax rate stored per invoice or calculated on the fly?

The tax rate and calculated tax amount are stored on each invoice at the time of creation. Changing your default rate does not affect previously created invoices.

Next steps