On our zen cart website, we have many tutorials and helpful articles which cover a wide range of topics. Some of these tutorials relate to various tax configuration setups, troubleshooting and management. The aim of this guide is to help you better understand those tutorials, and allow you to more effectively implement them in your zen cart ecommerce shop.
Tax class – This setting is assigned to products and shipping, and is used to calculate final fees.
Tax zone – This is a regional setting which is used to help determine tax rates by geography.
Tax rate – This rate is calculated by combining any given product’s tax class and shipping zone with the relevant tax percentage.
To decide the correct tax to add to an order total, Zen Cart takes the shipping address, and determines which of your preset tax zones it falls into. It should be noted that zen cart specifically uses the shipping address for this, and not the billing address.
Zen Cart determines tax rates, on the other hand, by comparing the shipping address to the tax zone which has been set up for said tax rate, as well as by the tax class assigned to your products. Each of your products can have one tax rate assigned to it, no more. For the most part, you will only need to set one tax class(GST/HST/PST) for all of your products, because all merchandise is taxable or non-taxable with no middle ground.
It is good to keep in mind, though, that creating different tax classes for different groups of items is possible. This is useful, for example, if you sold soap and lotion in the same zen cart store, and the tax for soap was slightly less than the tax for lotion.