When creating a store, it is important to set appropriate tax rates for your customers.

Create a New Tax Rate

For example you need to create 5% tax for California. In this case, you need to perform the following steps:

  1. Go to the Store Control Panel.
  2. Go to the System SettingsZones page. Click the New Zone button.
  3. Change the name of the created destination zone. Then click Add state... and add the necessary state (for example, "United States: California"). Save the changes.
  4. Go to the System SettingsTaxes page.
  5. Click the New Tax button.
  6. Enter your tax name and define the other settings.
  7. Click on the New Rate button. Select the zone created earlier and enter the tax rate (for example, 5%). Save the changes.

If you have many destination zones, repeat step #7 for each of them.

  • If you want to set up the same rate for several different states, you can create a zone consisting of these states and set up tax rate for this zone.
  • Tax calculation algorithm determines which tax to apply by looking through the configured tax rate list, top-down. When it finds a matching zone, it stops and applies the corresponding tax rate. So you can define tax rate for particular state(s), then add a rate for "USA" at the bottom of the list. In this case, USA rate will be applied to all states except the states configured explicitly.

There is also a pre-defined zone named "Other zones" that defines tax for locations matching no zone mentioned in the rate list.

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