When creating a store, it is important to set appropriate tax rates for your customers. You can set the tax settings for your store, or set the tax for an individual item in the product menu. You have the option to set automatic taxes or manually configure tax rates based on destination or product.
Create New Tax Rates
To create new tax rates:
- In the left panel, click eCommerce, and then click Manage Store.
- Click Settings, and then click Taxes. You have the following options:
- Click the Enable toggle next to Automatic. For more information on using automatic tax rates, see Automatic Tax Calculations.
- Click Manage Tax Rates to configure your tax rates based on destination or products sold.
- If you want to customize your own taxes and clicked Manage Tax Rates, click +Add New Tax.
- Configure the following:
- Tax Name. Type a name for the tax.
- Tax applies to. Select Subtotal or Subtotal + Shipping. Optionally, select if you want to Include tax in product prices.
- Zone defines by. Select Shipping address or Billing address. To manage zones, click Manage zones and define the zones to which your tax is applied. For more information about shipping, see Shipping Options.
- Rates per zone. Type a tax rate for All destinations, or click Specify rates per zone.
- Click Save.
- If you want to set up the same rate for several different states, you can create a zone consisting of these states and set up tax rate for this zone.
- Tax calculation algorithm determines which tax to apply by looking through the configured tax rate list, top-down. When it finds a matching zone, it stops and applies the corresponding tax rate. So you can define tax rate for particular state(s), then add a rate for “USA” at the bottom of the list. In this case, USA rate will be applied to all states except the states configured explicitly.
There is also a pre-defined zone named “Other zones” that defines tax for locations matching no zone mentioned in the rate list.
Configure Product Tax Rate
To set an individual tax rate for a specific product:
- Go to the Store Control Panel, click Catalog, and then click Products.
- Next to the product you want to add a tax to, click Edit Product.
- Click Tax and Shipping.
- Select Enabled next to the tax rate you want to use for the product. To waive taxes for this product, disable all tax rates.
- Click Save.