Settings

Next Admin | Tax Setup

The Settings > Taxes module allows Merchants to configure and assign tax classes for customers, products, and shipping. When a customer checks out, the correct tax value is calculated according to the tax class of the customer and the product, and the tax rules configured for the region (billing region, shipping destination, and shipping origin).

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Creating a New Tax Class

To create a new tax class, you must define a new tax rule. ​Tax rules are composed of a product class, customer class, and tax rate.

How to Create a New Tax Rule

  1. Select New Tax Rule.The Tax Rule window displays.mceclip1.png
  2. Enter a ​Code and ​Name ​for this tax rule.
  3. Define the ​State and Postcode.​ NOTE​: To include all postcodes, enter an asterisk (*) in this field.
  4. Choose the ​Customer Tax Class to which the rule applies.
  5. Choose the ​Product Tax Class to which the rule applies.
  6. Choose a ​Tax Rate.
  7. Click SAVE​.

Howto Create a New Customer Tax Class

Every customer is assigned to a tax class. Follow these steps to create a new customer tax class.

  1. Select New Customer Tax Class.The Customer Tax Class window displays.mceclip2.png
  2. Enter a ​Name and ​Code ​for this tax class.
  3. Select if this tax class is Active or Inactive and if it is the default tax class.
  4. Click SAVE​.

How to Create a New Product Tax Class

Every product is assigned to a tax class to accurately calculate tax in the shopping cart. Follow these steps to create a new product tax class.

  1. Select New Product Tax Class. The Product Tax Class window displays.mceclip3.png
  2. Enter a Name and Code for this tax class.
  3. Select if this tax class is Active or Inactive and if it is the default tax class.
  4. Click SAVE.

Multi Location / Multi Product Tax Class Example

Some Merchants may have more complex tax set up than others. They may have multiple locations that charge a different tax for the same product. Set up in this situation is easily achieved by following the steps below. 

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Our Merchant in this example has stores in two states -California and New York. Each state taxes food products differently. California at 10% and New York at 8%. Also, neither state charges a tax on apparel.

  1. Create two new Product Tax Classes - FOOD and MERCH. These are the tax classes you are going to use in your product import in the TaxClass field.mceclip2.png
  2. Create two new Tax Rules - CALI and NYNY. In this example, all stores in California use the same tax rate. It may be that specific stores in a postcode within California have a separate tax. Simply create Rules and include the proper postcode in the Postcode field.mceclip1.png
  3. Tax Rules for Merchants with different product tax classes (food versus merchandise, for example) which are taxed differently would require a repeat in Step 2 above to add s new tax rule. In our example, add a Tax Rule for California Merchandise as we did for California food.
  4. Import your products assigning them to the proper Product Tax Class (FOOD or MERCH) to complete the process.

In our example above, we only had to have a geographic tax area at the state level. In some cases, you have different tax rules at the city or town level. You would have to create separate tax rules for each Postcode your store resides in. Products are taxed at the rate for the location they are fulfilled from.

 

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