Tax treatment of convenience fees for dealers in the USA

We now offer the option for dealers to pass along credit card fees to their customers through our convenience fees feature. This gives you, the dealer, the ability to recover credit card processing costs associated with transactions on the platform.

Please note TOOLBX does not calculate tax on convenience fees. Dealers are responsible for determining and remitting the correct tax amount for transactions with convenience fees.

A general rule of thumb is if a sale includes both taxable and exempt items, plus a convenience fee, tax should only be collected on the portion of the fee related to taxable items. However taxability will vary from state to state. Dealers should ensure the legality of charging convenience fees within your jurisdiction and industry.

Dealers are responsible for understanding and complying with the tax treatment of convenience fees within the U.S state and local sales tax framework. Consult with your accountant to guarantee accurate tax calculations and compliance with all tax obligations.