Hotcakes has configuration pages for both standard sales tax, and VAT (value added tax). You can configure these settings in the Taxes settings. You should consult with your legal and/or accounting teams prior to configuring your tax schedule(s).
If you're not sure what VAT is or if you should be using it, you don't need to use it. VAT is primarily only used by European storefronts.
The following prerequisites will be necessary to accomplish the goals of this article:
- Have access to your Hotcakes store administration
- Have working and accurate knowledge of how tax should be applied in your jurisdiction(s)
If you haven't already done so, you really should first consult with your legal and accounting teams to ensure that your tax strategy gets applied correctly. This will ensure that any work you do here will be accurate and you won't find yourself in a difficult situation later during tax season or audits.
Click the Settings main menu item and then click Taxes.
This page is where you configure the tax information for your store.
|Apply VAT Rules||Enable this setting if your store should be applying VAT rules. When you have this enabled, your product prices should include the VAT amount. The store will reverse-engineer the value of your product using your tax schedule to continuously calculate and display the appropriate totals in the various views of the store and store e-mails.|
|Tax Provider||By default, the Hotcakes tax provider will be selected and enabled. This provider will require that you manually enter and maintain a tax schedule to define your taxes for each supported tax jurisdiction. The other built-in tax provider is Avalara's Avatax, which has it's own documentation. If you want to use another provider, you can have your development team add your own tax provider.|
The "Edit" button next to the tax provider drop down list allows you to edit the configuration for the selected tax provider.
Creating a tax schedule alone won't do anything for your store. You'll need to also assign the tax schedule to one or more products before taxes are calculated and applied to any orders. You'll see how to do this in the product details editing view.
The "Add New Tax Schedule" button allows you to create a new tax schedule. You can have as many or few tax schedules as you'd like. This includes having no tax schedule. Not every store is required to collect tax.
Whether or not you need a tax schedule depends on the tax provider you choose to use. The provider may or may not make use of a tax schedule.
How many tax schedules you need depends on your catalog and tax jurisidiction. You may need many tax schedules to match up with the various products you sell. As an example, if you sell software, clothing, and alcohol, you may need two different tax schedules - one for clothing and another for alcohol. In another jurisdiction, you might need a third for you software products.
Editing Tax Schedules
Once you add at least one tax schedule, you'll begin to see a grid-based listing of all of the tax schedules you've added in the store. The grid will have two columns. The first allows you to see the schedule name, and the second column will allow you to either edit or delete the tax schedule.
Whether you edit an existing tax schedule, or create a new one, you'll see a popup window similar to the one below. This popup allows you to manage your tax schedule, beginning with the name. You should ensure that the schedule name is named well enough to easily identify its purpose. You'll see this value in drop down lists when you edit your products (see the image above).
The grid you see here has a grid header that relates directly to the actual grid below. This area is used to add your various taxable regions that you need to support. The columns for both are defined below. The countries and regions you see here are defined in the countries settings.
|Country||This is the country that defines the taxable area for this row. If you don't define a region or postal code, all orders for customers in this country will be matched to the tax rates in this row.|
|Region||This is the region that defines the taxable area for this row. If you don't define a postal code, all orders for customers in this region will be matched to the tax rates in this row.|
|Postal Code||This is the postal code that defines the taxable area for this row. All orders that match the country region, and postal code for customers in this region will be matched to the tax rates in this row.|
|Rate (%)||This is the tax rate that will be charged for any products that are assigned to this tax schedule, provided they match the tax area for this row. The rate can be a full number or contain as many as three decimal points. For example the following values are all valid: 8.0, 8.5, 8.25, and 8.275. These are percentage values, such as 8.275%.|
|Shipping Rate (%)||If this tax area needs to charge tax for shipping, this is the tax rate that will be charged. The rate can be a full number or contain as many as three decimal points. For example the following values are all valid: 8.0, 8.5, 8.25, and 8.275. These are percentage values, such as 8.275%.|
|Applies to Shipping||When this checkbox is checked, the rate you see in the shipping column will be applied to the orders that match the tax area defined in this row.|
|[no name]||This column allows you to delete the current tax area row. You'll want to do this when you need to correct a tax area.|
Once you begin adding your taxable areas, your grid will begin to look something like this.
Click the "Save Changes" button to save any updates you've made and close the popup.