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Charging Product-Specific Tax Rates

Some of your products may have special taxes that apply to them, or may be exempt from taxes altogether. This guide will help you change the product to a different tax class, whether you have set up your taxes manually or used automatic tax calculation with Avalara AvaTax.

 
 

Manual Tax

By default, products will be assigned the Default Tax Class, and will be charged the rate assigned to the default tax class. If your store’s tax calculations were set up manually, you will create a new Tax Class or use the Non-Taxable Products class instead, and assign it the appropriate tax class.

1. Go to Store Setup › Tax and select the Tax Classes tab. Create a new tax class for your products. If you need to make products tax-exempt, make sure that there is a Non-Taxable Products class.

2. Click the Tax Rates tab. Edit the Rates for each zone, to make sure the correct rate is listed for your new tax class and Non-Taxable Products class.

3. Edit your product. In the Summary section, select the appropriate tax class from the drop-down menu.

Assigning a Tax Class

 

Need to edit multiple products? A product’s tax class can be added in a product import.

4. Save your changes. To test that the new tax rate is being charged correctly, create a Test Order with that product.

 
 

Automatic Tax with Avalara AvaTax

For stores using Automatic tax calculation with Avalara, tax rates are determined by Avalara Product Tax Codes. Product tax codes assign products to categories which will determine which tax rates are applied to it. Avalara product tax codes can be assigned to products one at a time via the control panel, or in bulk via a CSV product import. To learn more about Avalara Tax codes, see Avalara’s Documentation about What you Sell.

Manually Adding Avalara Product Tax Codes

1. Edit your product, and locate the Avalara Product Tax Code field under the Product Details tab.
Product code box

2. Enter the code in Avalara Product Tax Code. Click Download Tax Codes link to get a full list of all product codes from Avalara or use the search Avalara Taxcode Search tool.

3. Save your changes.

Importing Avalara Product Tax Codes

1. Export Products using the Bulk Edit Template.

2. In the CSV, find the column for Avalara Tax Codes.

3. Using the Avalara Product Tax Codes, fill in the appropriate tax codes for your products.

4. Importing your CSV to update your products.

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