Setting Up Tax

Tax is set up within 'Business Settings | Tax'. You can have up to two taxes applied to an order at once.

There are two approaches to tax calculation:

·      Simple - Always applies tax, no matter where the customer is ordering from. You can allow customers the option of manually exempting themselves in the checkout.

·      Advanced - Applies tax based on where the customer is ordering from - this can automatically exempt customers if they are ordering from outside your tax zone. Advanced also allows you to create multiple rates of a particular tax.

Simple Tax Setup

With 'Simple' selected in 'Business Settings | Tax' the following settings are available:

Field	Meaning
Include Tax 1 Include Tax 2	Select the box if you want to include that tax in the online store. If you do not select either box then no tax will be calculated in the online store.
Description	Enter the name of the tax as you want it to appear on your web pages and on invoices.
Message	Enter text that describes the tax. This will be shown to customers in the checkout.
Rate	The tax rate should be entered as a percentage.
Allow Exemption	Selecting this box will allow customers to exempt themselves from tax online.
Prompt	This is the prompt for the check box that people need to select in order to exempt themselves.

Advanced Tax Setup

Advanced tax provides a sophisticated method of creating and assigning taxes that will correctly apply to all orders placed by customers from a specific geographical zone.

'Taxes' Grid

Use this grid to enter all the different taxes that you are charging in your online store. Click the '+' in the top left of the grid to create a new tax. Delete names by clicking the arrow sign next to the name to be deleted and press the keyboard [Delete] key.

Field	Meaning
Name	Enter the name of the tax as you want it to appear on your web pages and on your invoices.
Tax Rounding	In order that Actinic can calculate tax, you must decide the type of rounding to be applied for each tax. You can apply rounding by item, order line or complete order. Please see the note below.

Tax Rounding Rules

·      Per item - Actinic calculates the tax on a single item and then rounds it. The tax is then multiplied by the number of items in a line to calculate the tax per line.

·      Per order line - Actinic calculates the tax per unit price multiplied by the quantity in an order line, and then applies rounding.

·      Per order - Actinic calculates the tax for each product line and rounding is applied to the product tax total rather than on individual order lines.

There are four types of tax rounding supported by Actinic, each of which can be applied to a line, an item or an order:

·      Scientific - 1.5 and above is rounded to 2, below 1.5 is rounded to 1.

·      Down - 1.5 and below is rounded to 1, above 1.5 is rounded to 2.

·      Up - anything above 1 is rounded to 2.

·      Truncate - anything below 2 is rounded to 1.

'Tax Rates' Grid

The 'Tax Rates' grid is used to create tax rates within a tax. It allows you to create more than one rate for a tax. You create entries by clicking the '+' sign and typing the name in the field. Delete names by clicking the arrow sign next to the name to be deleted and press the keyboard [Delete] key.

Field	Meaning
Name	Type the name for the tax rate (50 characters max).
Rate	Enter the tax rate as a percentage - up to 4 decimal places.
Default	If a tax has more than one rate select the rate that is to be used as the global tax rate to be applied to all products, unless overridden at the product level. In the Product window, any additional rates will be available in a drop down list. See Product Tax Treatment for more.

Tax By Location

The 'Tax By Location' options are used to set which customer address is used to calculate the tax.

Field	Meaning
Always Apply Taxes	The tax calculations will be based on the order contents irrespective of the invoice/delivery destination. The 'Tax Zones' area will be unavailable, but you can assign Tax1 and Tax2 and exemption as required.
Tax By Delivery Address	Select this option if you wish to apply taxes based on your customers' delivery address.
Tax by Invoice Address	Select this option if you wish to apply taxes based on your customers' invoice address.

Tax Zones

If you apply taxes by either delivery or invoice address, the 'Tax Zones' area will be available for you to assign taxes to geographical areas. The zone name can be any name you choose.

There are some example tax zones already in this area to help you. Click 'Edit Zone' in order to see the countries/states that make up that tax zone.

To remove a tax zone, click 'Delete Zone'.

To create a tax zone click the 'Add Zone' button. You will then see the 'Edit Tax Zone' dialog.

Field	Meaning
Tax Zone Name	Type the name of your zone - the zone name will not appear on any documentation.
Zone Members	The members of your tax zone. Click the '<' button to add countries/states into your zone. Click the '>' button to remove a member.
Available Regions	The list of available countries/states. A country/state can only be a member of one zone. For information on editing the content of this list, go to Changing The List Of Countries And States.

There are some other controls in the 'Tax Zones' area:

Field	Meaning
Default Zone	Select the tax zone you wish to be your default zone. This is the zone that the online store will assume the online customers are from (and charge tax accordingly) until the online customer selects otherwise.
Do not allow 'None of the Above' as a zone member	Prevents buyers selecting the 'None of the Above' online location, thus restricting your customers to the specified locations in your zones.

Taxes Levied

This is where a Tax 1 and a Tax 2 can be applied to each zone. When you select a Tax Zone, the text label above Tax 1 changes to confirm your selection.

Field	Meaning
Tax 1 Tax 2	From the drop down list select the tax to be applied. If you select '(None)' in each box then no tax will be applied in this zone.
Allow Exemption	Selecting this box will allow customers to exempt themselves from tax online.
Message	When people exempt themselves from tax, you may want them to enter a reference number for the exemption e.g. 'Please enter a valid EU VAT number'. No validation will be carried out online, but you can check the value in the downloaded order.
Prompt	This is the prompt for the check box that people need to select in order to exempt themselves.

 

Finally, if you are applying two taxes, Tax2 has an option called 'Apply To Running Total Including Other Taxes' (bottom right hand corner of the 'Tax' tab). Select this option if you want the Tax2 rate to be applied after the Tax1 rate has been applied. This can be used by such locations as Montreal, Canada where Tax2 is applied to the calculated Tax1 value.

For example, normally we have:

Tax 1 = % * price

Tax 2 = % * price

With this field selected:

Tax 1 = % * price

Tax 2 = % * (price + Tax 1)