As you know, when selling products to consumers, you may need to charge and collect sales tax. Some states don't require sales tax, but most due. Moreover, the rules for calculating and collecting sales tax varies from state to state, country to country.
Note
Before configuring your Sales Tax Rules, you may need to consult with your accountant. The examples in this book are purposely simple; your actual sales tax configuration may be more complex depending on your situation.
Before we dive into creating Sales Tax Rules, let's understand a bit about the relationship Magento creates between Sales Tax Rules, Customer Tax Classes, Product Tax Classes, and Tax Rates & Zones. The following chart illustrates this relationship:
 |
The tax rule that calculates sales tax on any particular item is based on a combination of the type of customer, the type of product and the applicable tax rate based on the geographic location of the shipping destination.