> ## Documentation Index
> Fetch the complete documentation index at: https://help.tiretutor.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# How to Set Up a State Tire Tax Cap

> Use this when your state requires a percentage-based tire tax but caps the amount at a fixed dollar value per tire.

## Use this when your state requires a percentage-based tire tax but caps the amount at a fixed dollar value per tire (for example, Arizona: 2% of the tire price, up to a maximum of \$4.66 per tire).

<Frame>
  <img src="https://mintcdn.com/tiretutor/KKLx568cSj-lc6K5/images/resources/how-to/how-to-set-up-a-state-tire-tax-cap-1-desktop.jpg?fit=max&auto=format&n=KKLx568cSj-lc6K5&q=85&s=e323aa9fad01fbe22a1062d15e8be757" alt="The Tax Group - Default settings panel, with Sales Tax rates of 6% state and 4% local for both Parts and Labor. Below, State Tire Tax lists four rows: Default at $0.50, Essex County at 2% with a Cap per tire field set to $0.00, Studded at $7.00, and Florida (Taxable checked) at $1.00, above an Add Variable State Tire Tax link and Reset and Save buttons." width="452" height="885" data-path="images/resources/how-to/how-to-set-up-a-state-tire-tax-cap-1-desktop.jpg" />
</Frame>

**1. Open Tax Settings.** From the left-hand menu, go to Shop Settings, then find the tax settings section.

**2. Choose your tax type.** Toggle between a flat dollar amount or a percentage. Select which you need and fill in the information.

**3. Enter your tax percentage.** For Arizona, for example, this would be 2%.

**4. Enter the per-tire cap.** In the cap field, enter the maximum dollar amount to charge per tire. For Arizona, this would be \$4.66. (Leave the cap field empty if you do not want a cap.)

**5. Save your settings.** TireTutor will now apply the lower of the two values — either the calculated percentage or the cap — to every tire on a work order.

**How it works on a work order:** The tax is applied per tire and multiplied by the tire quantity. If the tire's percentage-based tax would exceed the cap, the cap is used instead. If it's under the cap, the percentage is used.

**To override on an individual work order:** Open the work order, click into the tire tax dropdown, and adjust the dollar amount or percentage as needed, then save. This will recalculate the tax for that order only.