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Example 1.
Suppose, your store is located in Texas, United States, and you need to impose a 8.25% sales tax on all orders delivered within Texas (The sales tax is not charged on deliveries made outside Texas). The tax needs to be calculated based on the discounted subtotal amount of orders before any shipping charges are applied.
To configure this tax, follow these steps:
| 1. | Set up a destination zone for Texas (for example, name this zone "Texas"): |
Countries:
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United States
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States:
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United States: Texas
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Counties:
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Cities:
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Zip/Postal codes:
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Addresses:
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| 2. | Go to the 'Taxes' section of your store's administration back-end and add a new tax: |
| a) | Call it your state name or whatever you want (for example, "Texas" for the tax service name and "Texas sales tax" for the tax display name). |
| c) | Set rates to depend on Shipping address (not Billing, as you only need to tax orders going to Texas addresses; customers buying products to send out of state as a gift should not be charged sales tax). |
| a) | Set the rate value to 8.25%. |
| b) | Apply it to the zone "Texas". |
| c) | Set the membership level to All. |
| 4. | If you haven't yet done so, adjust 'Taxes options' for your store as needed. |
| 5. | Apply the tax to all the products to which it needs to be applied by highlighting the tax name on the 'Product details' page. Make sure that the 'Tax exempt' drop-down box for these products is set to No. |
Please note that if the cost of shipping for different locations in Texas is not the same, you will have to define several destination zones for Texas (a separate zone for each Texas location with a different shipping rate) and to apply the tax rate of 8.25% to each of these zones. Technically, this means that you will have more than one rates defined for Texas sales tax, and each of these tax rates will have the value of 8.25% and will be applied to a certain destination zone in Texas.
Example 2.
Suppose, your store sells products to your own state and to two neighboring states. You have two categories of customers, retail and wholesale. Wholesale customers correspond to the membership level "Wholesale", retail customers are just ordinary customers (registered or anonymous) without a membership level. For example, you need to impose a sales tax on products purchased by retail customers and shipped within your own state. Any customers who order products to be shipped out of state and wholesale customers in-state do not pay sales tax.
In this situation, the sales tax can be set up as follows:
| 1. | Set up a destination zone for your own state (for example, "Zone 1"). |
| 2. | Add a tax and name it your state's sales tax. |
| 3. | Define two tax rates for this tax: |
| ▪ | Set the first tax rate equal to the sales tax amount that needs to be applied to in-state retail purchases. Apply this rate to Zone 1 and All membership levels. |
| ▪ | Set the second tax rate to 0%. Apply this rate to Zone 1 and to the Wholesale membership level. |
This way everyone in Zone 1 except Wholesale users will pay the sales tax. Wholesale users will see a "0%" tax line appear on their checkout page.
Please note that if the cost of shipping for different locations within your state is not the same, you will have to define several destination zones for your state (a separate zone for each location with a different shipping rate) and to apply the sales tax rate to each of these zones.
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