Overview
Sales tax in MotionOps starts with the tax rates you set up in Business Settings. Once your rates exist, you choose which line items are taxable and which rate applies - on proposals, change orders, and invoices.
You can set one rate as your default so it applies automatically, group several rates together when a job is subject to more than one, and mark individual items as non-taxable.
Tax rates are created in the Web App. Marking items taxable works in both the Web App and the Mobile App.
MotionOps doesn't decide your tax rates. You're responsible for knowing which rates apply to your work and your jurisdiction. If you're unsure, check with your accountant or tax professional.
When to Use This Feature
You're setting up MotionOps for the first time and need your state or local sales tax in place before you send a proposal.
You charge tax on materials but not on labor, and need to control that item by item.
You work across county or city lines and need more than one rate available.
A job falls under both a state and a local tax, and you want both applied without picking them one at a time.
A customer is tax-exempt and you need their line items to show no tax.
Your local rate changed and you need to update it going forward.
How It Works
There are three pieces to understand.
Tax rates are the rates themselves. Each one has a name and a percentage. You create as many as you need.
The default rate is the one MotionOps applies automatically. Only one rate can be the default at a time. If you haven't set one, tax defaults to 0%.
Every MotionOps business also comes with a built-in No Tax rate set to 0%. Use it for non-taxable items and exempt customers. You don't need to create it.
How to Create a Tax Rate
Go to Business Settings and open the tax settings page.
Add a new tax rate.
Enter a Tax Name your team will recognise - for example "NJ State Tax" or "Sussex County".
Enter the Tax Rate as a percentage, such as 6.625.
Mark it as your default if this is the rate you charge most often. Only one rate can hold this at a time - setting a new default removes it from the previous one.
Save the rate.
The rate is now available in the tax selector everywhere you build a proposal, change order, or invoice.
If your list of rates gets long, use the search field on the tax settings page to find one by name.
How to Apply Tax to Line Items
Tax is controlled per line item, so you can charge tax on materials and leave labor untaxed on the same document.
Build your proposal, change order, or invoice as usual.
On each line item, mark whether it's taxable.
For taxable items, choose the tax rate from the selector. You can search by name if you have several rates.
Check the summary at the bottom of the document. It shows your Taxable Total and the Tax calculated from it.
How Tax Is Calculated
Discounts come off before tax is applied. The order is:
MotionOps adds up your taxable line items to get the subtotal.
Any discount is subtracted, giving the Taxable Total.
The tax rate is applied to that Taxable Total.
So a $1,000 taxable subtotal with a $100 discount and a 7% rate produces $63 in tax, not $70.
Tax on Blended Line Items
Blended line items combine labor and material into a single entry. Each part is taxed independently.
That means you can mark the material portion taxable and leave the labor portion untaxed within the same blended item - which matches how many states treat contractor work.
See Blended Proposals for more on how blended items work.
Marking Items Taxable on the Mobile App
Your team can control tax from the field. When adding or editing a line item on the mobile app, there's a taxable toggle in the item screen.
This works on proposals for all line items, and on change orders for newly added line items.
Document summaries on mobile show the taxable amount and the tax portion, the same as on web. Tax rates themselves can only be created and edited in the Web App.
Changing a Tax Rate Later
When a rate changes, edit it in Business Settings. The change applies to documents you create from that point forward.
Invoices that have already been sent keep the tax that was applied when they went out. The rate is stored on the invoice itself, so updating your settings never rewrites history or changes what a customer already agreed to pay.
Draft invoices are the exception - tax on a draft can still be changed by editing a draft Proposal.
Tips & Best Practices
Name rates by jurisdiction, not by number. "Bergen County 6.625%" is easier for an office manager to pick correctly than "Tax 3".
Set your most common rate as the default. If 90% of your work is in one town, making that rate the default removes a decision from every proposal.
Build a group for every area you work in. If you regularly cross into a city with its own rate, a group means your team applies both taxes in one click instead of remembering the second one.
Use the No Tax rate for exempt customers. Applying No Tax explicitly is clearer on the document than leaving tax off entirely, and it shows the customer you handled their exemption.
Get tax right before you send. Once an invoice is out, the tax is locked. Fixing it means voiding and reissuing.
Review your rates every January. Local rates change more often than most contractors expect.
Things to Know
Only one tax rate can be the default at a time.
If no default rate is set, tax on new documents starts at 0%.
Every business has a built-in No Tax rate at 0%. It's there automatically.
Tax is applied to the Taxable Total, which is your taxable subtotal minus any discount.
Once an invoice moves past Draft, its tax is fixed. Later changes to your rates don't affect it.
Tax groups are internal. Customers see each individual tax listed separately on their documents.
On blended items, the labor and material portions are taxed independently.
Tax rates are created and managed in the Web App only.
If your account is connected to QuickBooks Online, review how your tax setup maps across. See QuickBooks Online Sync Settings.
To report on what you've collected, use the Tax Report. See Tax Reporting.
Troubleshooting
No tax is calculating on my proposal.
Check two things: whether the line items are marked taxable, and whether a tax rate is selected on them. An item that isn't marked taxable produces no tax regardless of your default rate.
The tax amount looks lower than I expected.
If the document has a discount, tax is calculated after the discount is subtracted. Compare the rate against the Taxable Total in the summary rather than against the original subtotal.
I updated a rate but an invoice still shows the old one.
That's intended. Once an invoice leaves Draft status, its tax is locked to what applied at the time. Void and reissue the invoice if it needs the new rate.
I can't find the rate I need in the selector.
Search by name — the selector supports it. If the rate genuinely isn't there, it hasn't been created yet in Business Settings.
My customer is tax-exempt.
Apply the built-in No Tax rate to their line items. The document will show 0% rather than omitting tax entirely.
Have questions? Reach out via the support chat or email support@motionops.com.