Magento 2 Beginner Class; Lesson #25: Magento Tax Rules Video Lecture | Magento: Build an E-Commerce Site (English)

part of accepting payments on your store
is of course going to be charging the
appropriate taxes for purchases for
which taxes are relevant setting up
taxes on our store is going to be a
multi-part process but we're going to
start by going to stores and here under
the taxes group we're going to click tax
rules now setting up tax rules can be a
little confusing at first but I'm going
to try to clear things up for you one
thing that might help you understand
everything is that any given tax rule
consists of three elements a product
class a customer class and a tax rate
the product class is a property that
belongs to a product and the customer
class is a property that belongs to the
customer a tax rule takes a tax rate and
applies it to a combination of customer
class and product class now that may
sound like a lot to digest but we're
going to walk through the whole process
of setting up tax rules so currently we
don't have any tax rules our store will
not charge taxes to any purchases now
that's probably not going to be quite
right in most cases so we're going to
click add a new tax rule and here's
where we're going to start fitting up a
new tax now obviously you're going to
have to look into your tax laws to
determine who to tax which orders to tax
how much to tax and whether certain
products are taxed different amounts but
once you have that information this is
where you're going to start creating
those rules so I'm going to say from my
store I'm just setting up a basic
Alabama sales tax so we're going to call
this rule AL sales tax then you're going
to need to define or select an already
defined tax rate currently has
out-of-the-box us-canada us new york
neither of those are going to apply to
us we're going to add a new tax rate
we're going to have this little form
slide in for tax identifier that's
simply the name of this tax rate we
just kind of go with what we're already
saying and call this al Tex now there
are a number of ways you get the tax you
can set it up pers if code per state per
country if it's something that applies
to the whole entire country then keep in
mind star in either here or the zip code
field stands for anything so if we just
do star star the United States that
means any ZIP code in any state in the
United States will have this tax applied
to it you can also do partial zip codes
you can say any zip code starting with 3
5 and then put a star any zip code
starting with 3 5 will have this rate
applied to it since this tax rate is for
the entire state of Alabama we're going
to say any zip code in Alabama of course
we're working in the United States from
our example and I don't know what the
actual tax rate is for Alabama but let's
say it's 8.5% so we're just type 8 point
5 right there and then click Save now we
need to make sure that we have that new
tax rate selected as it is and not
something else
and not multiple tax rates unless of
course there are multiple tax rates that
need to apply in our case that's not
true right now so we're going to just
select al Tex now we're going to go and
open up additional settings here we can
define or select the customer classes
that the tax applies to we'll take a
little bit more in-depth look at this
later but right now out of the box we
have retail customer that's just going
to be your basic customer we're going to
stick with that for product tax class
these are the type of products that this
tax rule is going to apply to in this
case we have taxable goods selected
that's sort of the default generic any
product that needs to be taxed type rule
or class rather so we're going to stick
with that currently all of the products
on our website are set up as taxable
goods so they'll all be applied for this
roll in just a minute we'll add a new
tax class to a different tax rule so I
can show you how that works but for just
the basic sales tax we're going to say
retail customers and taxable goods then
we have priority here now when you're
setting up the priority for a tax rule
that determines the order that the tax
is applied we have this little
description here tax rates at the same
priority are added others are compounded
what that means is that if we have say
two or three tax rules all with priority
zero then all of those tax rates are
going to be applied to the base cost of
the product so for example if we have a
product that costs $100 and we have
three textual x' that all apply a 5% tax
to that product if they all have the
same priority then we're going to take
five percent of 100 and then we're going
to do that two more times for the other
two tax rules five percent of 100 again
and then five percent of 100 again and
the total including tax is going to be
one hundred and fifteen dollars that's
pretty straightforward however if they
had different priorities then what would
happen is the tax rule with the first
priority would apply to five percent and
then you would have one hundred and five
dollars then the next textual in line
would apply the five percent to that one
hundred and five dollars and then the
one coming after that would apply the
tax rate to whatever that total was of
adding five percent to one hundred and
five dollars it would add five percent
to that total so that's how the
priorities work now another thing to
take note of here is that the lower
number here means the higher priority in
other words priorities with the lower
number are calculated first and then as
the numbers go up those numbers are
added afterwards so if we have one tax
with five dollars or five percent rather
in a priority zero and another one with
priority five
then the one with priority zero would be
calculated first and then the tax rate
with priority five would be calculated
according to what the percentage was
already added to of the original product
that's what it means by compounded as
opposed to be added it calculates the
priority then goes on to the next one
takes that subtotal and creates a new
subtotal essentially internally with the
next priority text then we also have
calculate off subtotal only it's not
necessary in most cases to check this
box because we don't really want to
calculate taxes off of the subtotal even
though it might seem like we do really
what we want are the taxes to be applied
or calculated based on the products this
is especially important for orders that
have multiple items that fall under
different tax rules you want each items
tax to be applied appropriately rather
than the subtotal of the entire order
then sort order that's not really
important this is simply where this tax
rule is going to show up on the back end
of our website it doesn't have anything
to do with what the customer sees or how
the tax is charged we also have import
and export options here that gets a
little bit more advanced but if you want
to look into it essentially you can
create a spreadsheet a comma separated
values spreadsheet with tax rates and
important those into your site if you
have something to do that with so we
have this basic sales tax rule set up
now for Alabama we're going to save the
rule let's add one more very quickly
let's say that for whatever reason in
Alabama sumatran goods are charged an
extra 5% tax again who knows what so
we'll call this al sumatran tex
we'll add a new tax rate we can just do
al sumatra any ZIP code in alabama and
the rate is 5%
save that open up our additional
settings these are for retail customers
but they're going to be for a different
tax class of goods this is not going to
apply to just any taxable good this is
only going to apply to Sumatran Goods so
we need to add a new tax class in that
case so we'll add that and write
Sumatran Goods click the checkmark over
here and it will pop up and we need to
deselect taxable goods because again we
only want this to apply to Sumatran
Goods
not just any generic taxable good on the
site well they say the priority for this
is zero it's added to the subtotal
rather than compounded and everything
else is just fine so we're going to save
that rule and now since this Alabama tax
on Sumatran Goods is supposed to be in
addition to the regular Alabama sales
tax we need to go back to this Alabama
sales tax rule open up our additional
settings and add Sumatran goods to our
Alabama sales tax if we don't do this
this may be a little bit confusing but
just bear with me if we don't do this
then the regular Alabama sales tax will
not be applied to any product marked as
a Sumatran goods in other words if we
have a Sumatran good but we didn't add
the Alabama sales tax we didn't add this
tax class to the Alabama sales tax rule
then through muttering goods would only
have that Sumatran sales tax applied to
them and not the Alabama sales tax that
we're also setting up but in our case
Sumatran Goods need to have both so we
need to make sure that this Alabama
sales tax is applied to Sumatran Goods
as well that's a very important thing to
keep in mind as you add additional
product tax classes to your website
so once we've done that let's save our
rule and then in order for this Sumatran
text to actually apply to our Sumatran
Goods we need to change the tax class of
that product and any other products that
this tax rate applies to in our case
that's just one so we're going to go to
products and catalog we're going to
scroll down to find our sumatra select
we will click on that to edit it and
right here close to the top we see text
class currently this is under taxable
goods now that we've added a new tax
class we have Sumatran Goods
so we'll select that and click Save and
now once you've done all this instead of
your tax information
Magento does not say that you need to
flush your cache and in most cases you
don't however I have come across
situations where tax rates were applied
properly until I did flush the cache so
just to be safe to keep ourselves out of
trouble let's click on system and cash
management and from here we're going to
click the big orange slush Magento cache
button now that that's done let's check
this out and see if everything works
properly so we're going to click on our
name and we'll open the customer view in
a new tab and specifically we want to
make sure that the Sumatran goods are
working appropriately so we'll find our
sumatra select wherever that may be on
your page click Add to Cart and once
we've done that it might take just a
second as you saw but then we'll have a
little one next to our cart here we can
click on here go to checkout you can
just fill in some dummy information and
click Next and then we'll see that we
have our cart subtotal our shipping
which we'll talk about a little bit more
later and then the applied it text and
if you do the math on this then you'll
see that the 8.5% text as well as the
additional 5% tax are added here and the
math comes out correctly and our tax
rules are working properly
everything's great one more
before we go back on the backend of our
website you may have noticed over here
on stores under taxes we also have a
section here called tax zones and rates
if you click on that this is nothing big
but it is good to know about this is
just a more centralized place to view
your taxed zones and rates and edit
those as needed so it's not anything
that you need to configure independently
but it is an easy place if you need to
change something just to go here click
on whatever tax rate that you want to
play around with and change the rate
change the place where it's applied or
whatever