How to Configure Taxes?
Your site must be upgraded to the appropriate plan to use the Automatic Tax Calculator
Before setting up tax rates, you should:
Before setting up tax rates, you should:
- Determine which items are taxable.
- Decide if tax should be included in the item price and if shipping rates should be taxed.
- Enter the addresses of all physical locations for your company.
How Tax is Calculated
The amount of sales tax charged on a purchase is determined by applying the tax rate(s) to the total price of all taxable items in an order. Optionally, you can include tax in the item price, and you can also tax shipping.
Include Tax in Item Prices
When sales tax is included with item prices, tax is treated as something that the store owner will need to pay, rather than the customer. Sales tax is displayed on order receipts but not added to the total price.
- To include tax in prices, go to Settings > Taxes. In the Tax Calculations area, check the box for “Taxes are included in item prices”.
Charge Tax on Shipping
Rules for charging sales tax on shipping vary from state to state. If you’re not sure what's required, you should consult with a professional.
To turn on sales tax for shipping, go to Settings > Taxes. In the Tax Calculations area, click the checkbox for “Charge taxes on shipping rates”.
To turn on sales tax for shipping, go to Settings > Taxes. In the Tax Calculations area, click the checkbox for “Charge taxes on shipping rates”.
- Note: The automatic tax calculator tracks which states tax shipping, so there's no need to turn this on if you’re using that feature.
Configure Shipping Boxes
The default box setting for RTS is 10" x 10" x 10" with a max weight of 70 lbs. To change this, go to Settings > Shipping > Advanced Settings. You can edit the dimensions, maximum weight, and optionally set a maximum number of items that will fit into the box. If you want to add more box sizes, use the “Create new” link and enter the information for each box. You can then edit your items to link them to any one of your box sizes. The default box will be used for items that don’t have a specific box assigned to them.
- How does this work? Here’s an example:
- Let’s say you’re selling handmade pottery in varying sizes and weights, such as coffee mugs and large vases. The default box size comfortably fits two of your coffee mugs, so you can set the maximum items to two and the max weight to the same as two coffee mugs. However, you need a much larger box for the vase, so you create a second box that is 18” x 18” x 18” with an item capacity of one and a max weight that matches the vase weight. You would then edit each item and associate them with the corresponding box to ensure that the larger box is used if someone purchases a vase.
- Note: If a customer places an order where more than one box size is needed, RTS will use multiples of the largest box size needed to accommodate the number and weight of items purchased.
Add Physical Store Locations
If you're located in the US and plan to use the automatic tax calculator, you’ll need to enter the addresses for all locations where your company has a presence, including any locations that you ship from. Again, it’s best to consult with a tax professional if you have questions.
- If you've already entered an address in Settings > Shipping or Settings > General, you’ll see that information on the tax setup page as well. To enter a new address, go to Settings > Taxes and click the button on the upper right. Save when you’re finished, then follow the same steps to add any other locations.