In some situations, you may need to offer tax exemption for some customers (government agencies, resalers, b2b sales, etc.) or products. Therefore, you will need to configure the respective tax exemption rules to prevent your store from charging taxes on such customers or products.
This article describes how to create tax exemptions for both products and customers manually irrespectively of the tax add-on you use.
In X-Cart, it is possible to enable automated tax exemption using the following add-ons:
For both customers and products: Tax Exempt Add-on
Below you will find information on:
To set up a tax-exempt option for customers manually, you'll need to:
1. Create a special membership for tax-exempt buyers and assign it to the customers that can order goods tax-free. See more info on creating user memberships in Managing User Membership Levels.
2. Set up the store tax system based on the memberships.
No matter which add-on you use for manual tax configuration, disable the "Use the same tax rates for all user membership levels" option when setting up taxes. Then create tax rates based on the memberships used in the store. For example, the tax-exempt membership needs a 0% tax rate applied.
To set up tax-exempt options for products manually, you'll need to:
1. Create and assign a specific tax class for the tax-free products. See more info on tax classes creation in the section Tax Classes.
2. Configure a zero tax rate for tax-exempt products as described in Configuring rates for tax classes.