This article explains how to complete the configuration of general sales tax rates in the process of configuring sales tax. Note: If you need to configure sales tax rates that will apply only to shipping charges, please follow the instructions in the article Setting up Sales Tax Rates on Shipping Charges.
To set up general tax rates:
1. In the common tax settings, use the Taxable base selector to specify the type of costs that will be the basis of your tax rates calculation.
The available options are as follows:
- Subtotal + Shipping cost;
- Discounted subtotal + Shipping cost;
- Discounted subtotal;
- Individual settings for every rate.
For example, if you select “Discounted subtotal + Shipping cost”, your tax rate amounts will be calculated as percentages of the sum of the product subtotal after the application of discounts and the estimated product shipping cost.
If you need multiple tax rates calculated based on different types of costs, select the last option - Individual settings for every rate. Selecting this option adds a selector with the first four options from the above list for each of your tax rates allowing you to specify a taxable base for every tax rate individually.
2. In the General tax rates section below, add the tax rates you require.
First, click the New rate button:
Then, in the section that expands below, add a sales tax rate:
- Zone: Specify the address zone the tax rate should be applied to. The tax rate will be applied to the orders of the customers whose address belongs to the selected address zone. Whether it is their Billing or Shipping address depends on the option selected in the Address for sales tax calculation field in Common Tax Settings.
- Tax class: Specify the type of products (tax class) to which the tax rate should be applied. If you select the Default tax class option here, the tax rate will be applied to all the products that have the default tax class assigned.
- User membership: Specify the user membership level the tax rate should be applied to. The option Ignore membership allows you to create a tax rate that will be applied to all orders irrespective of the buyer’s membership. “User membership” column becomes available when the “Use the same tax rates for all user membership levels” option in Common Tax Settings is disabled.
- Taxable base: Specify the type of costs your tax rate calculation should be based on. The “Taxable base” column becomes available for general tax rates when the option Individual settings for every rate is selected in the “Taxable base” field in Common Tax Settings.
- Rate: Specify the tax rate amount as a percentage of the selected taxable base.
If necessary, use the New rate button to add rows for more tax rates. Complete the fields in each row as you require.
Please note that your settings are not saved until you choose to save them with the Save changes button.
After completing your tax rates setup, be sure to enable the tax for your store.