Taxes

Collecting taxes is accomplished by Tax Categories and Tax Calculations.

A Tax Calculation determines how much tax is withheld. Taxes can be calculated as a fixed rate or by address.

A Tax Category is a container for one or more tax calculations. Products can be taxed differently by assigning different tax categories to them.

Tax Categories

To apply any tax rate, you must first have at least one tax category. Follow these steps:

  1. Go to Site MenuCommerceSettings. Click the Taxes tab and then the Tax Categories sub-tab.

  2. Click Add. Give your tax category a name and a description and then click Save.

See Configuration for more on how to assign a tax category to a product.

Calculating Taxes

There are two kinds of tax calculations: fixed and by address. The fixed method applies the same rate to a product each time it is purchased, while the by address method applies only to buyers within a specified geographical region.

Setting a Fixed Tax Rate

A fixed tax method sets rates for each tax category independently. The tax collected then depends on the tax category assigned to a product. Follow these steps:

  1. Go to Site MenuCommerceSettings. Click the Taxes tab and then the Tax Calculations sub-tab. Click on Fixed Tax Rate.

  2. Enter a name and description for the method in the appropriate fields.

  3. Enable the Percentage toggle if the tax should be defined as a percentage of the purchase price. Disable to define the tax as a fixed amount.

  4. Enable Active toggle and click Save.

  5. Click the Tax Rates sub-tab. This displays a Rate field for each tax category. Fill in each field and hit Save.

Calculating Taxes by Address

Calculating taxes by address sets rates for geographical areas independently. You can apply several by address rates to a single tax category. When a product from that category is purchased, the tax rate appropriate to the buyer’s location is used. Follow these steps:

  1. Go to Site MenuCommerceSettings. Click the Taxes tab and then the Tax Calculations sub-tab. Click on By Address.

  2. Enter a name and description for the method in the appropriate fields.

  3. Enable the Percentage toggle if you want the tax to be defined as a percentage of the purchase price. Disable to define the tax as a fixed amount.

  4. Enable the Active toggle and click Save.

  5. Click the Tax Rate Settings sub-tab and then on the Add button.

  6. Fill out the following fields:

    Tax Category: This tax rate only applies to products assigned to the tax category you select.

    Rate: Set the tax rate, either as a percentage of the purchase or as an absolute amount (depending on what selection you made in step 3).

    Country, Region, Zip: This tax rate applies only to buyers located in the area you designate. To designate an entire country, leave Region and Zip blank; to designate an entire region, leave Zip blank.

  7. Click Save. Repeat steps 5 and 6 to add additional settings.

If you assign multiple settings to a single tax category (but specify different geographical areas), the rate appropriate to the buyer’s location is used. If you assign both a by address rate and a fixed rate to a single tax category, both rates will be applied.

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