1. From the Admin Panel, select Sales | Tax | Manage Tax Zones & Rates.
The Manage Tax Rates page is displayed. If this is a new installaNon, only two Tax Rates are listed: US-CA-*-Rate 1 and US-NY-*-Rate 1.
2. Click on Add New Tax Rate. The Add New Tax Rate page gets displayed:
3. Tax IdenIfier is the name that you give this Tax Rate. You will see this name when you select this Tax Rate.
The example that we saw is named US-CA-*-Rate 1. NoNce how this name tells you the Country, State, and Zip/Post code for the Tax Rate. (The asterisk indicates that it applies to all zip codes in California.) It also tells which rate applies. NoNce that the name doesn't give the actual percentage, which is 8.25%. Instead, it says Rate 1. This is because the percentage can change when California changes its tax rate. If you include the actual rate in the name, you would need to rename this Tax Rate when California changes the rate. Another way this rate could have been named is US-CA- All-Retail. Before creaNng new Tax Rates, you should develop a naming scheme that works for you and your business.
4. Country, State, and Zip/Post Code determine the zone to which this Tax Rate applies. Magento calculates sales tax based upon the billing address, and not the shipping address. Country and State are drop-down lists. You must select from the opNons given to you. Zip/Post Code accepts both numbers and leters. You can enter an asterisk in this field and it will be a wild card. That is, the rate will apply
to all zip/post codes in the selected country and state.
You can enter a zip/post code without entering a country or state. If you do this, you should be sure that zip/post code is unique in the enNre world.
Suppose you have one tax rate for all zip codes in a country/state, such as 6% for United States/Pennsylvania. Also, suppose that you want to have a different tax rate for a few zip codes in that state. In this case, you would create separate tax rates for those few zip codes. The rates for the specific zip codes would override the rates for the wild card. So in a Tax Rate, a wild card means, "All zones unless this is overridden by a specific zone." In our demo store, we are going to create a Tax Rate for retail customers who live in the state of Pennsylvania, but not in the city of Philadelphia
5. Click on Save Rate. You are taken back to the Manage Tax Rates page. The Tax Rate that you just added should be listed on the page.
This procedure is useful for adding Tax Rates one at a Nme. However, if you need
to add many Tax Rates at once, you will probably want to use the Import Tax Rates
feature. This enables you to import a .csv, or a text-only file. You usually create
the file in a spreadsheet such as OpenOffice Calc or Excel. The next secNon covers
imporNng Tax Rates
A Tax Rule is composed of a Customer Class, Product Class, Tax Rate, and the locaNon of the purchaser. You have just created the third part of that formula: the Tax Rate. The Tax Rate included the locaNon and the percentage of tax. You created the Tax Rate by manually entering the informaNon into the system, which is suitable if you don't have too many Tax Rates to type.
