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Should I tax customers ordering from outside my state or province?

QUESTION: I understand that I am to charge the sales tax rate for where I am located. Do you know if this means that I charge the same rate for customers ordering from outside my state? How do I setup Sales taxes?

ANSWER: Generally, you have to charge sales tax only for orders which have shipping address in your state/province (you have to consult your accountant or tax office to confirm it). To do this, you will need to set up new Destination Zone and New Tax for it.

Example:

Adding new destination zone

  • Click "Destination zones"
  • Click [Add new...]
  • Enter Zone name:: USA (Illinois)
  • Click [Update]
  • Scroll down to States
  • Select "USA : Illinois"
  • Click [<<] to transfer this state into current zone.
  • Scroll down and click [Save zone details]

Adding new Tax rate/system

  • Click "Taxing system"
  • Click [Add new...]
  • In Tax service name enter TAX or VAT
  • In Tax display name enter Illinois Sales Tax
  • In Apply to text box enter: =DST+SH
  • Click [Save]
  • Under VAT: Tax rates in Rate value box enter: 7.5
  • Under Zone select: USA (Illinois)
  • In Apply to text box enter: =DST+SH
  • Click [Add]

Now all orders with destination from USA (Illinois) zone will be charged 7.5% tax on Discounted Subtotal + Shipping

Let us know if you need help with setting up sales taxes in your store.

 

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  1. Admin FinestShops

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