What is a tax category?
Every service and material in your Price Book has a tax category behind it — this is what Automated Sales Tax (AST) uses to calculate the right tax for the item based on your customer's location.
By default, every item uses a general category that works correctly for most Pros. You can optionally choose a more specific category if you want — this can improve accuracy in certain states, especially if you sell a mix of different item types.
Do I need to do this?
No, this is optional. AST calculates tax correctly for the vast majority of Pros without any changes here. You might want to set a more specific category if:
You run a business with a wide mix of service types
You've noticed a specific item isn't being taxed the way you expect in your state
ℹ️ Note: If you're not sure whether a specific category applies to one of your items, check with your accountant or tax advisor — Housecall Pro automates the calculation, but can't advise on which category is correct for your business and jurisdiction.
How does AST decide where to calculate tax from?
By default, AST calculates sales tax based on your customer's location for most services. In a handful of states, the default may calculate tax based on your business location instead for certain types of service work - if you're not sure whether this applies to you, assigning a more specific tax category (see below) can help, or check with your accountant if something looks off on a specific job.
How do I assign a tax category?
Go to Price Book in your account
Select Services or Materials, then open the item you want to update
In the Pricing section, find Tax category (below the Taxable toggle)
Click the dropdown and search for the category that best matches this item
Select it, then Save.
ℹ️ This works the same way for both services and materials
What happens if I don't set one?
Leaving this blank doesn't mean tax won't be calculated - the item just uses the standard default category automatically.
Will changing a tax category affect jobs I already created?
It can, for jobs that haven't been invoiced yet. Housecall Pro recalculates tax whenever something changes on a job - like editing a line item or updating the service address - so an existing job linked to that Price Book item will pick up the new category the next time it recalculates.
Once an invoice has been sent, though, the tax on it is locked in. Changing the category afterward won't retroactively change an invoice you've already sent.
What about line items I type in manually instead of picking from my Price Book?
Those always use a general default tax treatment and aren't affected by tax categories - categories only apply to items selected from your Price Book. If you want more control over how something specific is taxed, add it to your Price Book first.
Need help?
We're here for you! Chat with Support using the Blue Chat Bubble in your Housecall Pro account, or give us a call at (858) 842-5746.