What is a compound tax?
A compound tax is calculated on top of the primary tax. Let's take an example where the price of an item is $100. After calculating the primary tax at 10%, the item is now $110. A compound tax of 5% will bring the total item price to $110 + 5% => $115.50.
How to add a compound tax in QuickBooks Commerce?
Go to Settings> Tax Types> New Tax Type
Click on the check box that indicates has a Compound Tax.
Fill in the fields as you normally would for a new tax type and include the compound tax with the rate. QuickBooks Commerce will compute this tax for your sales orders when you select it.
Note
Once you use this tax type in an order, you will not be able to edit it.