Tax Regions

Shipping Products and Sales Tax

If you need to collect different taxes based on where you are shipping products to you need to set up Tax Regions. Tax Regions should only be set up if necessary for your business.

Shipping cannot be directly set up a new sale. To be able to use shipping and the associated Tax Region you need to first create a quote or order and then convert this into an invoice.

To Set Up Tax Regions:

  1. Open the Manager > Taxes
  2. Click the Tax Regions tab
  3. Click the '+' button to create a new Region
  4. Indicate its name and code
  5. If appropriate, add Sub-Regions, indicating the names and codes. The sales tax in sub-regions will be the sum of the sub-region plus the parent regions
  6. If appropriate, indicate the Default Tax Region

Once the tax region is created you need to set up the taxes that will be associated with the region and apply the region to them.

To Apply Tax Regions:

  1. Click on the Groups & Rates tab
  2. Create the single-rate Tax Groups and Rates sales taxes as indicated in Create a Single-rate Sales Tax
  3. You can group similar taxes into Tax Groups, that is state taxes into a state group, city taxes into a city group, etc. The Tax Rates within Tax Groups provide the tax rates for Regions and Sub-regions
  4. Select the Tax Group
  5. In the right-hand pane, associate the Tax Rate with the Region

To implement Tax Regions

  • In the Manager > Products > Pricing window, select the Tax Group that applies to the Product
  • On Customer cards, click the Shipping Info dropdown menu
  • Select the Tax Region that applies to the customer

The Tax report will show the sales tax collected for each tax authority

Note: Sales tax information configured in Checkout is not used in Shopify. Shopify sales tax information is configured through the Shopify admin login.