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Adjusting tax settings

From: Create Your First Online Store with Magento Go

Video: Adjusting tax settings

One setting that you are going to want to make sure that you get absolutely correct inside of your Magento Go store, before you take the store live is your tax settings, and the tax settings can be adjusted by going to Start My Store, going down to Payments and then setting Set Tax Calculations. Once you go into Set Tax Calculations, you will be brought to this box here where it says that in order to get your store ready to accept orders, you need to set up tax rates that are appropriate for your business. It also explains that tax rates can be set down to a ZIP or postal code level to adjust for variants in different areas of tax rates for localized taxes.

Adjusting tax settings

One setting that you are going to want to make sure that you get absolutely correct inside of your Magento Go store, before you take the store live is your tax settings, and the tax settings can be adjusted by going to Start My Store, going down to Payments and then setting Set Tax Calculations. Once you go into Set Tax Calculations, you will be brought to this box here where it says that in order to get your store ready to accept orders, you need to set up tax rates that are appropriate for your business. It also explains that tax rates can be set down to a ZIP or postal code level to adjust for variants in different areas of tax rates for localized taxes.

Once you have created your tax rates, then you have to specify something called a tax rule which defines what rates to use and when to use them. You can also create multiple tax rates and multiple tax rules that can be applied to different types of products or even different customers. So if you have like a retail set of customers, a wholesale set of customers, or a set of customers who buy things at cost, different things like that can adjust the tax rate. And then when you are ready to get started, it tells you need to set up at least one tax rate and at least one tax rule. If you need more information on this, there is a Knowledge Base article that you can click on, so if I clicked here and open this in a new tab, it takes you to this page to show you all of the information about tax rates.

So this is everything you probably ever want to know about setting up tax calculations. Now it's not the most exciting thing in the world, but it is very important, especially now that online commerce is becoming more of a vetted area. People are looking at this a little bit closer especially with the taxes and things online. So you need to make sure that you get this stuff correct. So let's click Continue right now and that's going to take me into the Manage Tax Rates section, and so I already have two in here by default. You may or may not see these yourself. To add a new tax rate, you just simply click Add New Tax Rate right here.

Then you give it a Tax Identifier. So for instance, let's say I am from Kentucky, I can set up KY State Tax, Country is United States, the state of course is Kentucky. I'm not going to filter by ZIP or postal code, but I am going to give it a tax rate percentage, and so the tax rate in Kentucky is around 6% and I would actually go and find the exact percentage but I am pretty sure it's around 6. Click Save Rate. Once I have saved that rate, you will see it pops up here, Kentucky State Tax, United States, Kentucky and 6% and now what I need to do is set up a tax rule for this.

So in order to do that, I need to go to the Sales tab, I need to go down to Tax and I need to go to Manage Tax Rules. So once I am inside of the Manage Tax Rules section, I need to add a new tax rule. And I'll give it a name, so in this case, I'll just call this KY State, I want it to apply to Retail Customers, on all Taxable Goods and I want to apply the Kentucky State Tax Rule. You can also prioritize and sort your tax rules if you want to, I am not going to do that this time though. Once I have all this set up, I'll just choose Save Rule, and I now have that rule in place, so anytime someone comes to this site and purchases something from Kentucky, it will charge them 6% sales tax, same way with if I lived in California, New York, wherever it might be, I could set that up so that it would charge the appropriate tax amount for the goods that I am selling in my store.

This is something that's very important and also something you want to do your homework on to make sure you get the right tax rates for where you live, and make sure that you adjust for any localized differences between ZIP or postal codes as well, because Magento Go gives you the power to do just that and gives you a finite level of control over all of these individual tax settings, which is really going to help your business in the long run.

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Create Your First Online Store with Magento Go

32 video lessons · 11123 viewers

Justin Seeley
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