Tutorial 2.6: Applying Tax Codes

The tax options can be different according to the country, state, province or territory you sell your products to to. Some European countries, Australia etc. have the "Goods and Services Tax", United States have "State tax",Canada has "Province tax" and so on. Tax Codes are tied into shipping so you will have to set that up as well.

Creating tax codes

Its entirely up to you whether you want to include tax as part of the product price or wish to have it as a separate item. By setting up tax codes and assigning these to products, the system is able to display and add the relevant tax for each product.

Heres an example of how this works and your options:

• You setup a new tax code, e.g. VAT with a value of 10%
• For every product that you add to the system, you add its sales price as ex-tax, e.g. $20 and chose VAT as the tax code applicable for this product
• When the customer views the product in the online shop, they will see the price as $22 ($20 10% tax). You can even chose to show the tax component as a separate item for further clarity.
• Alternatively you can avoid setting up your tax code and enter the product sale price as $22 which includes the tax in the price.

You can customize your tax does via: eCommerce -> Tax codes

Handling State Taxes

In this system every product can have its own tax rate. However in some countries it is a requirement by law to apply the rate of tax for the state that the products are being shipped to.

In particular if you are in the USA then your customers must pay state taxes on the purchases that they make. You can easily add an option to your shopping cart which prompts your customers to specify the state that the goods will be shipped to and automatically have the relevant tax rate for that state applied to all goods and shipping charges. To enable this for your online shop:

   * Go to eCommerce->Tax Codes and choose "United States of America"
   * Click on the link "Add all USA state tax rates" to add all state tax rates to your website
   * Now go to Admin->More Customize Options and choose "Online Shop Templates"
   * Choose "Shopping Cart"
   * Add or update {tag_shippingoptions} and change it to {tag_shippingoptions,true}

That's all you need to do to enable this option for your online shop. Now go to your online shop and add one or more products to the cart and checkout to see how this works.

Advanced Options

When you enable the shopping cart to automatically add state taxes to products you have a number of other configuration options:

• Only Charge Country Users - True by default. For example if your customers are in the US, then they are forced to choose the state that they want the goods to ship to and will need to pay the relevant taxes. However if the purchasing customer is in Australia and are shipping the goods to United States California, then they are not forced to pay state taxes.
• Ship to Single Country. If you only ship to a single country, then enter the 2-letter country code for that country, e.g. US for United States, otherwise leave empty. Empty by default to allow shipping to any country.
• Apply Tax to Shipping Charges - True by default. If you don't want state taxes to be applied to shipping charges, then set this to false.
• Apply Tax to Gift Vouchers - True by default. If the cart contains both products and gift voucher items then state tax is applied to all of them. By setting this value to false you will exclude state tax from being applied to gift vouchers. In the scenario where gift vouchers are excluded from state tax, the original tax rate for the gift voucher will remain applicable.

To use these options:

{tag_shippingoptions,true,OnlyChargeCountryUsers,ShipToSingleCountry,ApplyTaxToShipping,ApplyTaxToGiftVouchers}

For example this is the syntax for not adding state tax to shipping charges and gift vouchers:

{tag_shippingoptions,true,,,false,false}

Setting up GST (Goods and Services Tax) for Australia and Europe

If your online shop is in Australia and you wish to display your products with GST included in the price, charge Australian customers GST and subtract GST from the cost for all customers outside of Australia, this is how you do it:

Setting up the online shop

Here are the steps you need to take to setup the online shop:

1. Create a product with GST included in the cost and create shipping options with 10% GST applied to them
2. In the online shop enable State tax codes by changing {tag_shippingoption} in the shopping cart to {tag_shippingoption,true}
3. Go to eCommerce -> Tax Codes and add all AU States (e.g. NSW, VIC, NT, ACT, etc) with 10% Tax Rate

Checking the setup

Here are the steps you can take to make sure that everything works as it should:

1. Go to the online shop add a product to cart (assuming using AU URL) and go to checkout
2. Choose shipping option, which will also be inclusive of GST.
3. Now you will see a product + shipping and it's all inclusive of GST.
4. Choose a country other then Australia as destination country, GST is gone from Product or Shipping
5. Choose AU again as destination country, now you are forced to choose a state from the other drop down since we have defined these. 10% tax should get added.

• Tutorial 2: Setting_up_your_online_shop
• Tutorial 2.1: Ecommmerce product advanced options
• Tutorial 2.2: Configure my shipping options
• Tutorial 2.3: Configure my payment gateways
• Tutorial 2.4: Customize my ecommerce look and feel including products, catalogs, shopping cart and invoice layouts
• Tutorial 2.5: Advanced ecommerce options includes upselling, cross-selling, bulk discounts, product grouping
• Tutorial 2.7: Offering Discount Codes
• Tutorial 2.8: Offering Gift Vouchers
• Tutorial 2.9: Setting up Affiliate Programs