Knowledgebase: General Questions
How do I setup the Taxes by Zip Code
Posted by Thomas Burscheid on 25 September 2011 02:26 AM
The use of zip codes in your cart tax settings is pretty straightforward. Create your tax settings according to the manual; the only difference to the manual is, that you can now specify zip codes for a tax zone to limit the tax zone "area".
If a zip code is specified for an area, the tax zone is only "valid", if - additionally to the country and state/province - that zip code is used by the customer during checkout for his billing or shipping address. If you leave the zip code field blank, the tax zone is "valid", if the country and state/province is used by the customer during checkout no matter the zip code.
Below information will help you to understand how the tax system works in the cart.
1) Tax Class
You specify a tax class for certain types of product:
e.g.: Usually you will need at least one tax class for your products. If you sell special products that are taxed differently (if they have a reduced or special higher tax rate) you will need additional tax classes.
2) Tax Zone
You specify tax zones to be able to specify if a certain tax should be "added" to a product or not.
e.g.: If you have an item that is taxed for 5%, when the customer's address is in the United States, in New York and the customer's zip code is 10001, you will add this area to your "5% tax zone". If the same tax is collected when the zip code is 10002, you would also add this area to the same tax zone.
3) Tax Rate
A tax rate specifies a tax percentage in a tax zone for a tax class
e.g: Your items are sold with a tax rate of 5%, if the products are of a certain type (tax class) and the customer is in a certain area (tax zone).