Note: It is highly recommend that test orders be created to verify that taxes are calculated on orders for a variety of scenarios
Verify that the Tax Settings are configured for your company requirements
Stores>Configuration --> Sales/Tax
It is recommended that Taxes be Calculated After Discounts, like Promo Codes, have been applied.
Basic Tax Options
Magento: Stores / Tax Zones and Rates
In order to charge sales tax in your online store, you must set up tax calculations. If tax calculations are not set up in Magento, taxes will not be added to any orders.
Tax Configurations By State
Magento: Stores / Tax Zones and Rates
Most merchants charge sales tax for orders shipped to the state where they are located, and often for other states.
For each state, specify whether or not to charge sales tax for orders shipped to that state by placing the sales tax rate for that state in the Rate Percent field, or put a zero in this field if you will not charge tax for that state.
Creating tax rates for your States/Provinces in Magento:
- Select Add New Tax Rate.
- The Tax Identifier can be whatever you specify to identify the state and tax rate.
- Select the Country this state or tax rate is in.
- Select the State or Province.
- If the tax rate is the same for the entire State or Province, select NO for the Zip/Post is Range. If your State or Province has multiple tax rates within it, you will choose YES here, and then add the Zip/Post Range to and from.
- Add the Rate Percent for that zip/post for the State/Province and/or the Zip/Post Code range. You will then add additional entries for the remaining zip/post code ranges that have separate tax rates within your State/Province.If there are none, move on to the next State/Province.
Uploading tax rates for your States/Provinces in Magento:
- Go to System / Import/Export Tax Rates.
- Choose to Export Tax Rates. This way you have a copy of the spreadsheet.
Automatic Tax Calculations
The standard Magento service allows you to specify whether to charge tax on a state-by-state basis, and to manually specify a single tax rate for each state.
The Tax Rate Lookup by AvaTax provides tax rate lookups based on the shipping zip code of the order, so taxes can be calculated accurately. With this feature, you won't have to maintain state tax rates manually! Simply indicate the states for which you charge sales tax, and let Avatax do the rest of the work for you.
With the Tax Rate Lookup by AvaTax feature, Magento looks up the exact tax rate for the shopper's shipping ZIP code. You don't have to worry about whether or not you should be collecting (for example) 9.25% for a shopper in Memphis, TN, or 9.75% for a shopper in Nashville, TN.
Tax rate lookups are only available for US ZIP codes. If you activate this feature, taxes will not be calculated for shoppers located outside the United States or for shoppers that enter in an invalid zip code.
Signing Up for the AvaTax Tax Lookup Feature
To sign up for the Tax Rate Lookup by AvaTax feature, go to http://www.avatax.com and sign-up for this feature. You will be given an Account Number, License Key, and a Company Code. Please contact your Magento Developer with this information to help configure your AvaTax module in Magento.
NOTE: The monthly fees associated with AvaTax are collected by Avalara, Inc. and are not included with your monthly billing of Commerce5
Viewing Taxes in Magento Admin Panel
Magento: Products / Catalog / Product Detail
When you have drilled down to a specific item, you can view that item's taxable status on the Prices tab.
Importing Orders to NCR Counterpoint
When you import Magento 2 orders into NCR Counterpoint, the sales tax will be based on the values on the order in Magento 2
Because sales tax is based on the tax rates defined in Magento 2 and not the store's tax code or the customer's tax code, taxes will display as tax overrides when you process orders in NCR Counterpoint.