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Setting Up Taxes

Magento Go uses both customer and product tax classes to determine the rules which are used as the basis of tax calculations.

Tax rules are a combination of customer tax class, product tax class, and tax rates. Each customer is assigned to a customer group, which in turn, is associated with a specific tax class. Products are also assigned a tax class when each record is created. Magento Go determines the tax by analyzing the tax class of the products in the shopping cart, the tax class of the customer, and the region where the transaction takes place. The region can be determined by the customer’s shipping address, billing address or shipping origin.

For field descriptions, see Configuration: Sales - Tax

To set up general tax calculations:

  1. From the Admin panel, select System > Configuration.
  2. In the Configuration panel on the left, under Sales, select Tax. Then, click to expand the Tax Classes section.
  3. Set Tax Classes for Shipping to one of the following:
    • Default: The default is None.
    • Taxable Goods
    • Shipping: Select this option if you charge additional tax on shipping.
  4. Click to expand the Calculation Settings section, and do the following:
    1. Set Tax Calculation Method Based On to one of the following values:
      • Unit Price
      • Row Total
      • Total
    2. Set Tax Calculation Based On to one of the following locations, according to your local requirements:
      • Shipping Address
      • Billing Address
      • Shipping Origin
    3. Set Catalog Prices to one of the following:
      • Excluding Tax: Catalog prices do not include tax.
      • Including Tax: Catalog prices include tax.
    4. Set Shipping Prices to one of the following:
      • Excluding Tax: Shipping amounts do not include tax.
      • Including Tax: Shipping amounts include tax.

      Note: This applies to shipping amounts defined through the Admin panel, as well as shipping amounts obtained from gateways.

    5. Set Apply Customer Tax to one of the following:
      • Before Discount
      • After Discount
    6. Set Apply Discount on Prices to one of the following:
      • Excluding Tax
      • Including Tax

      Note: If “Apply Tax after Discount” is selected, the applied discount on price, including tax, is calculated based on store tax.

    7. Set Apply Tax On to one of the following:
      • Custom price if available
      • Original price only
  5. Click to expand the Default Tax Destination Calculation section. Then, do the following:
    1. Set Default Country to the country where the tax applies.
    2. Set Default State to the state where the tax applies. By default, this option is not set, as indicated by the asterisk (*).
    3. Set Default Post Code to the ZIP or postal code where the tax applies. By default, this option is not set, as indicated by the asterisk (*).
    4. Note: These options apply only if the default country is set to United States.

  6. Click to expand the Price Display Settings section. Then, do the following:
    1. Set Display Product Prices in Catalog to one of the following:
      • Excluding Tax
      • Including Tax
      • Including and Excluding Tax
    2. Set Display Shipping Prices to one of the following:
      • Excluding Tax: Shipping prices do not include tax.
      • Including Tax: Shipping prices include tax.
      • Including and Excluding Tax: Shipping prices are displayed both with and without tax.
  7. Click to expand the Shopping Cart Display Settings section. Then, do the following:
    1. Set Display Prices to one of the following:
      • Excluding Tax: Shopping cart prices do not include tax.
      • Including Tax: Shopping cart prices include tax.
      • Including and Excluding Tax: Shopping cart prices are displayed with and without tax.
    2. Set Display Subtotal to one of the following:
      • Excluding Tax: Shopping cart subtotal does not include tax.
      • Including Tax: Shopping cart subtotal includes tax.
      • Including and Excluding Tax: Shopping cart subtotal is displayed with and without tax.
    3. Set Display Shipping Amount to one of the following:
      • Excluding Tax: Displayed shipping amount does not include tax.
      • Including Tax: Displayed shipping amount includes tax.
      • Including and Excluding Tax: Shipping amount is displayed with and without tax.
    4. Set Include Tax in Grand Total to one of the following:
      • Yes: Includes taxes when calculating grand total.
      • No: Does not include taxes when calculating grand total.
    5. Set Display Full Tax Summary to one of the following:
      • Yes: A tax summary is displayed in the shopping cart.
      • No: A tax summary is not displayed in the shopping cart.
    6. Set Display Zero Tax Subtotal to one of the following:
      • Yes: Displays a subtotal for orders with zero tax.
      • No: Does not display a subtotal for orders with zero tax.
  8. Click to expand the Orders, Invoices, Credit Memos Display Settings section. Then, do the following:
    1. Set Display Prices to one of the following:
      • Excluding Tax: Prices are displayed without tax.
      • Including Tax: Prices are displayed with tax.
      • Including and Excluding Tax: Prices are displayed both with and without tax.
    2. Set Display Subtotal to one of the following:
      • Excluding Tax: The subtotal is displayed without tax.
      • Including Tax: The subtotal is displayed with tax.
      • Including and Excluding Tax: The subtotal is displayed both with and without tax.
    3. Set Display Shipping Amount to one of the following:
      • Excluding Tax: The shipping amount is displayed without tax.
      • Including Tax: The shipping amount is displayed with tax.
      • Including and Excluding Tax: The shipping amount is displayed both with and without tax.
    4. Set Include Tax in Grand Total to one of the following:
      • Yes: Includes taxes when calculating grand total.
      • No: Does not include taxes when calculating grand total.
    5. Set Display Full Tax Summary to one of the following:
      • Yes: A tax summary appears on orders, invoices, and credit memos.
      • No: A tax summary does not appear on orders, invoices, and credit memos.
    6. Set Display Zero Tax Subtotal to one of the following:
      • Yes: Displays subtotal for orders with zero tax.
      • No: Does not display subtotal for orders with zero tax.
  9. Click to expand the Fixed Product Taxes section. Then, do the following:
    1. Set Enable FPT to one of the following:
      • Enable: Charges a fixed amount for the product tax, rather than a percentage.
      • Disable: Does not charge a fixed amount product tax.
    2. The following settings determine how Fixed Product Taxes are displayed throughout your store:
      • Including FPT only: The displayed price includes a fixed product tax, but not a description of the tax.
      • Including FPT and FPT description: The displayed price includes a fixed product tax and a description of the tax.
      • Excluding FPT, FPT description, final price: The displayed price does not include a fixed product tax, a description, or the price with tax.
      • Excluding FPT: The displayed price does not include a fixed product tax.
      Set each of the following fields to one of these values:
      1. Set Display Prices in Product Lists to determine how prices appear in products lists, such as the category page.
      2. Set Display Prices on Product View Page to determine how prices appear on the product page.
      3. Set Display Prices in Sales Modules to determine how prices appear in the Order Review section during checkout, and in the Items Ordered section of a sales order.
      4. Set Display Prices in Emails to determine how prices appear in the sales email confirmation that is sent when an order is placed.
    3. Set Apply Discounts to FPT to one of the following:
      • Yes: Discounts are applied to the fixed product tax amount.
      • No: Discounts are applied to the base price of a product without the fixed product tax included.
    4. Set Apply Tax to FPT to one of the following:
      • Yes: Tax is applied to the fixed product tax amount.
      • No: Tax is applied to the base price of products without the fixed product tax included.
    5. Set Include FPT in Subtotal to one of the following:
      • Yes: The fixed product tax is included in the shopping cart subtotal.
      • No: The fixed product tax is displayed under the shopping cart subtotal and is not included in the subtotal itself.
  10. When complete, click the Save Config button to save the settings.

See also:

Understanding Tax Settings

Video: Set Tax Calculation

Video: Optimize Your Tax Settings