Tax Configuration

Introduction

Taxes can be configured in the Administration subsystem so that specified rates are calculated and added to the total price during the checkout process. Depending on your configuration, it is also possible to combine and apply multiple taxes (such as federal, state and local tax) to a purchase.

Taxes can be set up and maintained using two methods: 1) creating/editing each tax control manually or 2) importing all data using a CSV file. Here we will discuss both methods and also provide you with a few examples to demonstrate how this works.

Method 1: Configuring Taxes Manually

To set up your taxes manually, you will need to work with the following areas in the Administration tab of the Admin Site – Tax Categories, Tax Jurisdiction Groups, Tax Jurisdictions, and Taxes – as well as the configuration pages for each of the catalog items.

The steps below summarize the process you need to follow to configure taxes.

  1. Create and configure Countries and Regions (Go to Administration > System Settings > Dictionaries > Countries): In Countries section create the countries you plan to sell your products in and set the appropriate country codes. For the country codes, it is important that you use the ISO Short code provided in the following link (http://msdn.microsoft.com/en-us/library/ms866171.aspx). Using the ISO Long code or anything else will not correctly calculate taxes during checkout.
  2. Create new Tax Categories (Go to Administration > Catalog System): In this step you will create tax categories that will be used later to associate your catalog items with the tax rates you define. For example you may create categories such as "General Sales," "Food," and "Luxury Items" depending on the tax regulations for your item types. The categories you create here will become selectable on the Page Details of your items (i.e., Variations/SKU Edit page) and on the Tax Edit page.
  3. Create and configure Tax Jurisdictions (Go to Administration > Order system > Tax Configuration): In this step you will specify particular Tax Jurisdictions. You can create different Tax Jurisdictions for a particular region by specifying zip codes, country codes, etc. Tax rates will be applied to whatever level of information you specify for each Jurisdiction. For example, if you specify only the country code as US, all shoppers with a US address (regardless of state, county etc.) will be included in this jurisdiction. Note: Country Code and Region Code you enter in the Jurisdictions Edit page must match the codes you used in step 1.
  4. Create and configure new Tax Jurisdiction Groups (Go to Administration > Order system > Tax Configuration): New Tax Jurisdiction Groups created here can include multiple Tax Jurisdictions.
  5. Create and configure Taxes (Go to Administration > Order System > Tax Configuration): Here you will specify tax rates and also associate the Tax Categories and Jurisdiction groups created in Steps 2 and 4.
  6. Associate Catalogs to the Tax Categories created in Step 2 (Go to Order Management > Catalogs): Now you will switch over to the Catalog Management subsystem and link specific catalog items to the appropriate Tax Categories. This can be done on the Pricing/Inventory page within each Variation/SKU Edit page.

Method 2: Configuring Taxes Using CSV Import

Using the CSV Tax Import functionality is a convenient way to quickly setup and update tax data in bulk. Creating a CSV tax file with a specified format (see "Example Scenarios" below) will allow you to complete steps 2 through 5 in one shot (above in Method 1). Step 6 of Method 1 can be done manually, but you can also use the CSV import functionality in the Catalog Management subsystem to associate catalogs to tax categories. Click here to see how CSV Catalog Import works.

Import your CSV tax file into your Commerce Manager by following the steps:

  1. Select the Administration tab in the Commerce Manager.
  2. In the navigation tree drill down to Taxes: Order System > Taxes Configuration > Taxes.
  3. Click Import Taxes on the menu bar.
  4. Choose Add New File and then Browse to select and upload your CSV tax file. The path of your chosen file will appear in the field.
  5. Click Upload File and then Save The File icon. The CSV tax file will appear under the Files Available for Import section.
  6. Select and highlight the CSV file and click the "Start Import" button.
  7. Your import should begin and complete successfully in a pop-up dialog box.
  8. You will now be able to view your tax setup in the Commerce Manager.

If you want to edit the existing setup, simply repeat steps 1 through 8 with your modified file.

Caution: Re-importing CSV files only edits existing information or adds new data, but nothing gets deleted. If you delete an entire row of data in the CSV file, you must manually delete those entries in the Commerce Manager. If in doubt, you can always delete all the tax data and perform the CSV tax import from scratch.

Sample CSV Files and Example Scenarios

Example 1: Single Tax Per Catalog Item Based on a Single Jurisdiction
For example, if your variable is State, then you can specify the tax rate on a state-level. So let's say CA is 9% and MA is 6%. If you placed an order from California, then 9% sales tax would be applied during checkout.

Jurisdiction

Jurisdiction Group

Tax Rate

Tax Category

California

CA Tax Group

9%

General Sales

Massachusetts

MA Tax Group

6%

General Sales

A sample tax CSV file called test.csv is available in this directory – [taxcsvsample1.zip ].

Example 2: Two or More Taxes Per Catalog Item Based on More Than One Juridiction
For example, if you have a luxury item that requires State and Federal tax to be applied, then you can specify tax rates on a state and federal level. So let's say a luxury item purchased in CA has a 9% state tax rate and a federal tax rate of 3%. Both taxes would be applied during checkout.

Jurisdiction

Jurisdiction Group

Tax Rate

Tax Category

California General

CA GS Tax Group

9%

General Sales

Massachusetts General

MA GS Tax Group

6%

General Sales

California Luxury

CA LX Tax Group

9%

Luxury Sales

Massachusetts Luxury

MA LX Tax Group

6%

Luxury Sales

US Federal Luxury

US LX Tax Group

3%

Luxury Sales

 


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