Tax Examples

Go to SettingsStore SettingsTax.

If you are in the United States, and don't have any special tax needs (e.g. excise taxes, tax-exempt customer groups), you can configure tax automatically.

Creating a Zone based on a State/Province with a Single Tax Rate

First, we'll create a zone based on a state with a single tax rate. In our example, we're using Texas.

1. In the tax settings area, click on the Tax Rates & Zones tab.

2. Click the Add a Tax Zone button.

Add a Tax Zone button

3. Name the zone "Texas", then choose the radio button next to This tax zone is based on one or more states/provinces.

4. Select United States in the Countries box, then select Texas in the States box.

5. Save your changes. You'll be forwarded to the Tax Rates tab.

6. Click the Add a Tax Rate button.

Add a Tax Rate button

7. Name the tax rate, then type in the percentages for the appropriate tax classes. In this case, we want to charge tax only on products (not gift wrapping or shipping), so we'll only put the 8.25 in that box, and put 0 for the rest.

8. Save your changes. Your Texas zone is set up successfully.

Click the rebuild your product prices link to finish setting up your zone and rate.

Rebuild prices link

Create a Zone based on a State/Province with Multiple Tax Rates

In our next example, we'll create a zone based on a province with multiple tax rates. In our example, we're using Quebec, which has both a federal and provincial tax.

1. In the tax settings area, click on the Tax Rates & Zones tab.

2. Click the Add a Tax Zone button.

3. Name the zone "Quebec", then choose the radio button next to This tax zone is based on one or more states/provinces.

4. Save your changes. You'll be forwarded to the Tax Rates tab.

5. Click the Tax Rates tab, then click the Add a Tax Rate button.

6. Name the tax appropriately. In our example, we're naming the federal tax rate "GST" (Goods and Services Tax). We only want to tax products, so only Default Tax Class will have a number other than 0.

Calculation Priority

7. We will leave the Calculation Priority at 0, since we want this rate calculated first.

8. Save your changes. You'll be forwarded to the Tax Rates tab.

9. Now we'll add the provincial tax rate. Click the Add a Tax Rate button.

10. Name the tax appropriately, then enter the percentages for the rates. In our example, we're naming the provincial tax rate "QST" (Quebec Sales Tax).

Calculation Priority set to 1

11. Change the Calculation Priority to 1, so it is calculated after the federal tax (GST).

12. Save your changes. Your Quebec zone is set up successfully.

Click the rebuild your product prices link to finish setting up your zone and rate.

Creating a Zone based on Zip/Postal Codes

Finally, we'll create a zone based on zip codes with a single tax rate. In our example, we're using Florida, which has different tax rates based on your location within the state. Even though we are only creating a single 7.75% zone here, in practice you'll want to create a zone for each different rate.

1. In the tax settings area, click on the Tax Rates & Zones tab.

2. Click the Add a Tax Zone button.

3. Name the zone "Florida 7.75%", then choose the radio button next to This tax zone is based on one or more postal or ZIP codes.

4. Choose United States from the Country dropdown menu, then type in the zip codes that apply to your specified tax rate. Type each zip code on a new line by hitting Return or Enter.

Using Wild Cards

The Zip/Postal Codes field supports use of the wildcards * and ?.

Using an asterisk, *, will capture all numbers from its position in the zip code all the way to the right. For example, entering 335* will capture all postal codes ranging from 33500 through 33599.

Using a question mark, ?, will capture numbers 0-9 only in the position that the question mark is placed. For example, entering 335?1 will capture 33501 through 33591.

Tax Zone Settings

5. Save your changes.

6. Now, click the Add a Tax Rate button.

7. Name the tax rate, then enter the percentages for each of the tax class rates.

Florida Tax Rate Settings

8. Save your changes. Your 7.75% Florida zone is set up successfully. Repeat the process to set up your other zones.

Click the rebuild your product prices link to finish setting up your zone and rate.

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