How to Configure a Taxable Order-Level Fee on Clover POS Using the Advanced Fees App (For Compliance-Requiring Fees)

Many merchants — especially in grocery, retail, environmental-regulated industries, or areas with strict fee taxation rules — must add order-level fees (e.g., environmental recovery fees, packaging fees, bag fees, or operational surcharges) that state or local tax authorities require to be included in the taxable amount, just like regular merchandise.

Important: Not all fee configuration methods in Clover treat fees the same way for taxation. The standard Service Fee option (via native setup or some apps) is typically designed for non-taxable service charges (e.g., gratuity-style or delivery fees in some jurisdictions). These fees are often added post-tax or excluded from the sales tax calculation, which can lead to compliance issues.

To ensure the fee is fully taxable and included in sales tax calculations, use the Advanced Fees third-party app and configure the fee as a Custom Item instead.

Why This Setup Matters

Using the wrong method can cause:

• Under-collected sales tax → liability during audits
• Mismatches between Clover reports and your accounting/ERP system
• Inaccurate tax remittances
• Confusing or non-compliant customer receipts

The Order via Custom Item method adds the fee as a taxable line item, allowing Clover’s built-in tax engine to apply the appropriate rate(s) automatically — exactly as required for many regulated fees (e.g., CRV/bag/environmental fees in certain states).

Step-by-Step Setup Guide: Taxable Fee via Advanced Fees App

1. Install or open the Advanced Fees app
   • Search for and install “Advanced Fees” from the Clover App Market if not already present (developed by a third-party provider for enhanced fee automation).
2. Create a new fee or edit an existing one
   • Launch the Advanced Fees app on your Clover device.
3. Choose the correct order method
   • Select Order via Custom Item (critical step — do not select Service Fee).
   • This option treats the fee like an inventory item rather than a traditional service charge.
4. Configure taxation
   • Once Custom Item is selected, additional options appear.
   • Enable the taxable setting (usually a checkbox labeled “Taxable,” “Apply Sales Tax,” or similar).
   • Assign the desired fee name (e.g., “Environmental Recovery Fee”), fixed amount or percentage, and any triggers (e.g., order subtotal thresholds, specific categories, or automatic application).
5. Apply additional settings (optional but recommended)
   • Set whether the fee is automatically added to qualifying orders.
   • Choose if it appears as a separate line item on receipts (best practice for transparency and audits).
   • Confirm the fee applies before or after discounts (usually before for taxable compliance).
6. Save and test thoroughly
   • Save the fee configuration.
   • Create a test order with qualifying items.
   • Verify on the order screen and receipt preview that:
     • The fee appears as a line item
     • Sales tax calculates on both merchandise and the fee amount
     • Totals match expected compliance requirements

Quick Troubleshooting Tips

• If tax still isn’t applying → Double-check that Custom Item (not Service Fee) is selected and the taxable toggle is enabled.
• For very large orders, some merchants report occasional issues removing/editing fees — capture a short screen recording and contact Advanced Fees support or Clover help if needed.
• Tax behavior follows your existing tax rates setup in Clover Setup → Taxes (ensure your default or category-specific rates are correct).
• Changes take effect immediately after saving — no device restart required in most cases.

Benefits of This Approach

• Full compliance with taxable fee regulations in most U.S. jurisdictions
• Clean reporting in Clover’s native Reports app (fees show as line items)
• Flexible automation across multiple locations/devices
• Seamless integration without custom coding
  

Video Demo: How to add Service Fee that is taxed on Clover Duo Register System

If your specific fee type (e.g., CRV, bag fee) has unique state requirements, cross-check with your local tax authority or accountant after setup. This configuration has helped many merchants resolve audit risks and reporting discrepancies effectively.