In X-Cart, zones (also known as "destination zones" or "address zones") are a means to configure and apply tax and shipping rules based on the customer's geographic location. A zone is a subset of countries, states, and zip/postal codes, that make up a specific region to which particular rules must apply.
Below are some examples of how to use zones properly:
Case #1 - You want to set up a sales tax of 7% for New Jersey in the United States.
Create a zone that will consist of just this one state, New Jersey;
Configure the individual sales tax rate for this zone.
Case #2 - You want to offer free delivery within the UK, a flat fee of £7.50 for delivery to other countries in Europe, and a flat delivery fee of £13.95 for delivery to the rest of the world.
Create three zones:
Zone 1 - the UK;
Zone 2 - Europe (including all European countries to which you will ship orders at £7.50 per order);
Zone 3 - the rest of the world (including all other countries to which you will ship orders at £13.95 per order).
Then set up the respective shipping rates for each of the zones.
Case #3 - You want to offer free delivery on orders shipped to addresses near your store.
Create a zone based on your store's zip code (or several zip codes corresponding to the areas adjoining the zip code area where your store locates);
Set up free shipping for this zone.
The number of zones you will need depends on the complexity of the tax and shipping configuration you want to achieve. You can create any number of zones, but in fact, you will only need as many zones as will be enough to configure your store's shipping and tax rules. Note that X-Cart allows configuring tax zones and shipping zones differently, i.e., they do not have to be the same.
Address zones used for tax configuration should not overlap, as this may affect the correct tax rates calculation and representation at checkout.