Meal and salea tax

Retail & Point of Sale

Topic summary

A food truck operator needs to apply different tax types across multiple locations:

The Challenge:

  • Prepared foods require both sales tax AND meal tax
  • Packaged goods require only sales tax
  • Three service areas with different sales tax rates (already set up as separate locations)

Recommended Solution:

Product-Level Configuration:

  • Navigate to Products > select item > Pricing section
  • Enable “Charge tax on this product”

Meal Tax Setup:

  • Go to Settings > Taxes and Duties > Tax overrides and exemptions
  • Create product-specific overrides for prepared foods
  • Apply correct meal tax rates for each location

Packaged Goods:

  • Leave standard sales tax settings (no meal tax override)
  • Shopify automatically applies location-based sales tax

Location Management:

  • Verify each location has correct local tax rates configured
  • Tax applies based on customer location at checkout

Status: Solution provided with step-by-step instructions. Awaiting confirmation if implementation was successful.

Summarized with AI on November 1. AI used: claude-sonnet-4-5-20250929.
1

I have a food truck and have prepared foods which are subject to sales and meal tax, as well as products and packaged goods which are subject to only sales tax. I also have 3 areas where I serve that have different sales tax rates (I did set up separate locations for these) my question is - How do I set the meal tax for certain items and then sales tax for those and the others that don’t require meal tax?

2

Hi @Kindbrewcoffee

I understand the challenge you’re facing with setting up different tax rates for prepared meals and packaged goods, especially across multiple locations with different sales tax rates. Let’s go step by step to get this set up correctly in Shopify.

How to Set Up Different Taxes for Meal Tax vs. Sales Tax

1-Use Shopify’s Product Tax Settings

  • Go to Shopify Admin > Products
  • Click on the product that requires a meal tax.
  • Scroll down to the Pricing section.
  • Check the box for Charge tax on this product and assign it to a specific tax override (more on this below).

2-Create a Tax Override for Meal Tax
Since your prepared foods are subject to a meal tax, you’ll need to create a tax override:

  • Go to Shopify Admin > Settings > Taxes and Duties
  • Click on Tax overrides and exemptions
  • Select Products
  • Choose the meal-taxed items and set the correct tax rate for them in each location where it applies.

3-Ensure Sales Tax Is Applied to All Other Items

  • Your packaged goods should still be taxed based on your location settings. If you haven’t customized tax settings, Shopify will apply the standard sales tax automatically.
  • Make sure these products do not have the meal tax override applied.

4-Handling Multiple Tax Rates by Location
Since you serve in three areas with different tax rates, you’ve done the right thing by setting up separate locations in Shopify. Now, make sure that:

  • Each location has the correct local tax rate under Settings > Taxes and Duties
  • When fulfilling orders, Shopify applies the tax rate based on the customer’s location at checkout.

Final Check- Go to Settings > Taxes and Duties, and double-check that your overrides are set correctly for meal-taxed items and that your general tax rates are applied to packaged goods.

  • If you’re using a third-party app to calculate taxes (like Avalara), ensure it’s configured to distinguish between meal and non-meal items.

Let me know if you need any clarification! Happy to help. :blush:

Best regards,
Daisy