Manual tax rates put you in full control of your Store’s tax rates. Sales tax will be calculated based on the rates you specify for each Country and Region.
To set up a Manual Tax Rate:
1. Go to Store Dashboard > Taxes > Set Your Own Rates > Get Started
2. Click on the +Add Tax Rate button to get started.
3. You’ll need to start by setting up your Country Tax rate before being able to add Province/State taxes. Each Tax rate can be set up to apply tax to Shipping costs, and/or to apply tax to Digital Downloads.
You should enter your Tax rate as a whole number - we will convert it to a percentage at checkout. For example, the whole number “5” will mean you have set up your Store with 5% tax.
Once you have a Country Tax Rate set, then you can add your regional State/Province Taxes.
4. You can choose to charge the Sub-Region (State/Province) tax rate ONLY, or COMBINE this rate with the Country rate you have entered earlier. If you select to Combine the Sub-Region rate with the Federal/Country tax you’ve set up, then the two rates will be added together for any orders being shipped to a client in that region.
Based on the above example, any Orders being shipped to a client in California would be charged tax at a rate of 8%. Any Orders being shipped to clients in the United States, but not in California would be charged 0% tax on their orders.
Tax Inclusive Prices
Do your product prices already include taxes? If so, you should still create tax rates as shown above and then turn on the Inclusive Tax option. With the Inclusive Tax option turned on, your prices will be assumed to have taxes already included at the rate you have specified.
To turn on Inclusive Tax:
1. Go to Store > Taxes > Settings
2. In your Tax Settings, you can select whether your prices already include tax by selecting "All my prices include tax". You can also enter your VAT Number (if applicable), which will be displayed on your invoices.
3. With the Inclusive Tax option, all taxes calculated on Shipping and Digital Downloads would be remitted based on the Country-level tax rule, and not State/Province rates.