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.