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Setup Taxes for eCommerce Store

Updated

If the products offered in your store are taxable, you will need to set up your tax providers. NOTE: Some states required taxes based on the location the product is shipped from (Fixed tax rate provider), and others require tax based on the location the product is shipped to (Tax By Country & State & Zip). Check with your own state tax revenue department for sales tax guidelines.

 

When it comes to charging sales tax, online sellers should start by looking at their home state and determining: whether they are based in an origin-based sales tax state or a destination-based sales tax state. Understanding sales tax rates can be tricky. But there’s one quick way to help you begin to understand what you should be charging your customers. The first thing you need to do is find out if you run your business out of an origin-based state or a destination-based state.

 

In origin-based states, sales tax should be collected based on where you, the seller, are located. In destination-based states, the correct sales tax rate is based on where the buyer is located (the destination of the sale).

 

 

 

Configure Fixed Tax Rate Provider Tax Setup (Origin Based)

If your taxes are required based on the location the product is shipped from (see above), configure the following:

  1. Click eCommerce in the left-hand navigation panel.
  2. Click the Configuration tab.
  3. Click Tax.
  4. Click Tax Providers.

  5. Click Configure, in the Fixed tax rate provider row.

  6. In the Tax row, click the Edit button. The Rate text box will be enabled.

  7. Enter your fixed tax rate.
  8. Click Update.

Configure Tax By Country & State & Zip (Destination Based)

Configure Tax by Country, State, and Zip if your state requires charging tax based on the location the product is shipped to. Check with your own state tax revenue department for sales tax guidelines. To configure the taxes, you will need information on taxes charged in all zip codes for locations that you ship to.

  1. Click eCommerce in the left-hand navigation panel.
  2. Click the Configuration tab.
  3. Click Tax.
  4. Click Tax Providers.

  5. Click Configure, in the Tax By Country & State & Zip row.

  6. In the Adding a new tax rate section, configure the following:
    • Country: Select the country to which you are shipping the product.
    • State: Select the state to which you are shipping the product. NOTE: If an asterisk is selected, this tax rate will apply to all customers in the given country, regardless of State.
    • Zip: Enter the zip code for which you are configuring tax.
    • Tax: If this destination is taxable, select Tax from the drop-down list.
    • Percentage: Enter the tax rate for this zip code.
  7. Click Add Tax Rate. Repeat steps 6 & 7 to add the tax rates for all necessary countries, states, and zip codes.