One of the initial activities you want to complete when setting up a store is setting up taxes and tax rates. Although taxes are a complicated subject, Red OnX strives to make the Webstore setting up process as simple as possible.
We’re not tax professionals, and this documentation is about how to use our software, not the values you should enter. For specific advice when it comes to what or when to charge tax/VAT/GST etc, we recommend consulting with a tax professional or an accountant on what may be your best options.
Each business is unique, and there’s no way we can cover every possibility.
Enabling Taxes
To access the tax settings screens, they first need to be enabled.
From the main menu, click Settings and then on the next page, click WebStore.
Select the Enable Taxes and Tax Calculations checkbox.
Save changes.
Configuring Tax Options
To start configuring taxes:
Go to: Settings > WebStore > Tax. This tab is only visible if taxes are enabled.
The Tax tab displays several options that can be set to suit your needs — settings you choose are based on the tax jurisdiction under which your store is located.
Prices Entered With or Without Tax
This option is perhaps the most important when managing taxes in your store, as it determines how you input product prices later on.
“Yes, I will enter prices inclusive of tax” means that all catalog prices are input using your store’s base tax rate.
In the UK, for instance, you would enter prices that include the 20% tax rate, i.e. You add a product price of £9.99 plus tax of £1.67. Customers in the US would only pay £8.32 while those in the UK would pay £9.99. as stated.
“No, I will enter prices exclusive of tax” would mean that your catalog prices need to be tax exclusive.
A UK store would enter 8.32 as the product price in the previous example. During checkout, a 20% tax would be added on top of this, making the total due £9.99.
The tax calculation for tax-inclusive prices is:
tax_amount = price – ( price / ( ( tax_rate_% / 100 ) + 1 ) )
The tax calculation for tax-exclusive prices is:
tax_amount = price * ( tax_rate_% / 100 )
Display prices in WebStore
This option determines how prices are displayed in your WebStore. Choose from Including tax or Excluding tax.
Select Excluding Tax if prices are entered without tax, or Including Tax if prices are entered including tax.
If these settings are not consistent, then for a certain combination of product prices and tax rates, customers may see an off-by-one rounding error. This happens when the calculated price (whether including taxes or not), has more decimal precision than allowed to be displayed by the shop, and as a result, prices are rounded.
Screenshot of the tax settings showing the series of settings that should be consistent when prices are entered inclusive of tax.
Screenshot of the tax settings showing the series of settings that should be consistent when prices are entered exclusive of tax.
If there is any inconsistency between the three tax display settings (Prices entered with tax, Display prices in the shop, Display prices during cart and checkout), a warning banner will appear stating the tax display settings are mismatched and in conflict. Clicking on “Use recommended settings” will change all the settings to align with the one set for “Prices entered with tax.”
Calculate Tax Based On
This setting determines which address is used for tax calculations.
Customer billing address
Customer shipping address (default)
Store base address
If you use store base address, taxes are always based on your store location and not your customer’s location.
Shipping Tax Class
In most setups, shipping tax class is inherited from the item being shipped, e.g., Shipping a reduced rate item such as baby clothes would also use a reduced rate. If this is not the case in your jurisdiction, choose a different tax class.
In the case of multiple tax rates in the order, the shipping tax will be applied as follows:
If you have a product with the Standard rate in the order, it will be used for the shipping regardless if this rate is high or low;
If you don’t have a product with the Standard rate in the order, then the first-rate found in the Additional tax class section will be used for shipping.
The goal is to make sure that your highest rate is listed first in the Additional tax class section if you don’t use the Standard class and if you need the highest tax rate to apply to shipping, for example.
Here is a setup to showcase it visually:
The Standard class is there by default, but Tax Option A, Tax Option B, and Tax Option C, etc., can be created for each additional tax class as needed. Note that it is not possible to delete the Standard tax rate, but you can leave it empty, and it will be ignored:
Standard rate is empty:
Tax Option A (18%) – the highest rate listed the first:
Tax Option B (15%):
Tax Option C (10%):
As a result, the highest tax rate gets applied to the shipping in the order with multiple tax rates assigned to products:
Rounding
If you enable Rounding tax at subtotal level, instead of per line, the rounding is done at the Subtotal level. Check your tax jurisdiction to know if this is done.
Additional Tax Classes
Your products are assigned Tax Classes. You should typically use the default Standard class. You can add the classes here if you sell products that fall under a separate tax class (i.e., Tax, excluding zero-rated products). Standard, Reduced Rate, and Zero Rate tax classes are included to get things started.
Each class is listed at the top of the tax settings page – click a class to view tax rates assigned to the class.
Display Prices During Cart and Checkout
This option determines how prices are displayed in your cart and checkout pages – it works independently of your catalog prices. Choose from inclusive/exclusive tax display.
Note: The address field needs to be filled in to get tax calculations if you have a tax table that distinguishes between locations.
Display Tax Totals
This determines if multiple taxes get displayed as one total during checkout, or as an itemized list of taxes.
Setting up tax rates
Tax classes are displayed at the top of the tax screen. Click one to view tax rates for the class.
In the tax rates table, you can define tax rates (one per row). Click Insert Row to get started.
The wildcard character (*) in this context means “apply to any,” meaning it will apply regardless of what is entered in that field. Should you choose to replace it with something specific, the customer will have to match exactly what you put in order for it to match. For example, if you put “Las Vegas” as the city, but your customer types “LV” or “Vegas,” it will not match, and the tax rate will not apply to their address.
- Country Code – 2 digit country code for the rate. Use ISO 3166-1 alpha-2 codes. Leave blank (*) to apply to all countries.
- State Code – 2 digit state code for the rate. See i18n/states/COUNTRYCODE.php for supported states. For the US, use a 2 digit abbreviation e.g. AL. Leave blank (*) to apply to all states.
- ZIP/Postcode – Enter postcodes for the rate. You may separate multiple values with a semi-colon (;), use wildcards to match several postcodes (e.g. PE* would match all postcodes starting with PE), and use numeric ranges (e.g. 2000…3000). Leave blank (*) to apply to all postcodes.
- City – Semi-colon separated list of cities for the rate. Leave blank (*) to apply to all cities.
- Rate % – Enter the tax rate, for example, 20.000 for a tax rate of 20%.
- Tax Name – Name your tax, e.g. VAT
- Priority – Choose a priority for this tax rate. Only 1 matching rate per priority will be used. To define multiple tax rates for a single area you need to specify a different priority per rate.
- Compound – If this rate is compound (applied on top of all prior taxes) check this box.
- Shipping – If this rate also applies to shipping, check this box.
Tax rate examples
Here is an example of a tax setup for a UK store — 20% for UK customers only.
In this example, we have a 6% tax rate for all U.S. states except California, which has a 7% tax rate and a local tax rate of 2% for ZIP code 90210. Notice the priorities — this demonstrates how you can ‘layer’ rates on top of another.
Importing and Exporting Rates
There are Import CSV and Export CSV buttons below the table with the rates. You can use them to import and export tax rates to and from a CSV file.
The CSV file for importing requires 10 columns;
country code, state code, postcodes, cities, rate, tax name, priority, compound, shipping, tax class
Leave tax class blank for standard rates.
Deleting Tax Rates
If you incorrectly added tax rates or the CSV import has incorrectly added tax lines, this information needs to be deleted.
To delete:
Go to: Settings > WebStore > Tax > Your Tax Rates (Standard, Reduced Rate, Zero Rate)
Select the incorrect lines by clicking on them. They are highlighted in yellow.
Select Remove Selected Rows. This deletes the highlighted row(s).
Save changes.
