Introduction

In X-Cart, you have two options to configure your taxes - manually or automatically. Depending on your target market and the tax rates you have to set up, you need to consider which X-Cart Addon is going to meet the requirements of your business best.

X-Cart supports the following Addons for manual tax configuration:

• Value Added Tax / Goods and Services Tax - This Addon is applicable for counties with VAT or GST taxation.
• Sales Tax - Applicable to US sales taxation.
• Canadian Taxes - Applicable to Canadian GST, PST, QST, or HST taxation.

X-Cart supports the following Addons for automatic tax configuration:

• AvaTax Sales Tax Automation - Applicable to US, Canada, and EU taxation.
• TaxJar Sales Tax Automation - Applicable to US taxation.

Please bear in mind that only the "Sales Tax" Addon is enabled by default X-Cart. Therefore, if you are planning to use another Tax Addon, you have to install it first. In case you are not sure how to complete this task, please refer to our tutorial based on How to install Addons (Modules) in X-Cart.

In this tutorial, we are going to cover the entire process of setting up taxes in your X-Cart Online Store.

Before you step into actually configuring your taxes, you should advise with a tax professional to ensure you are in full compliance in accordance with the local government law and regulations of the countries in which your business operates.

When your taxes are set up, taxation is going to be applied during checkout based on your customers' billing or shipping addresses.

Setting Up Tax Classes

As soon as you determine which Tax Addon is going to serve best to your needs, and it is successfully installed and configured in your X-Cart store, it is time to set up the appropriate Tax Classes.

The purpose of Tax Classes is to allow you to classify your products according to the tax rate that has to be applied to them. In case you are planning to apply the same tax rate to all product types, the need for tax classes is eliminated.

In X-Cart, all products have to be assigned to a given tax class. By default, all new products are automatically assigned to the Default tax class. In case you are going to be selling products requiring different tax rates, you have to indicate the relevant tax class.

For a start, please log in to your X-Cart Admin Area and navigate through the left-hand side menu bar to Store Setup > Taxes.

Once you land on the "Taxes" page, switch to the second "Tax classes" tab and click on the "New tax class" button.

Afterwar, a new empty field appears, where you need to specify the name of the tax class. When done, please hit the "Save changes" button.

With that done, your very first tax class is successfully created, and it is time to configure it.

Configuring Rates for Tax Classes

Now, you have to determine the actual tax rate, which is going to be applied to all products assigned with the tax class you have previously created.

Back at the "Taxes" section, you have to switch to the tab accordant to the tax system (Tax Addon) you are using in your store. In our case, it is "Sales taxes", but it could also be "VAT/GST" or "Canadian taxes".

When there, please locate the "General tax rates" section and click on the "New rate" button.

Similarly to the previous example, a new row appears where you have to configure the following details:

• Zone - From this dropdown menu, you have to select the Zone applicable to this tax rate. If you have not yet configured your Zones, please take a moment to review our tutorial based on How to set up and manage Countries, States and Zones in X-Cart and get familiar with the concept.
• Tax class - From this dropdown menu, you need to select the Tax Class applicable to this rate.
• Rate - In this field, you have to specify the percentage value of the tax rate.

Once you are ready, please make sure to click on the "Save changes" button to finalize the creation of the new tax rate.

At this point, you are all done and ready to assign the Tax Class to your products.

Assigning Tax Classes to Products

Now your Tax Class is created, the Tax Rate is configured, and all left to be done is to attach it to your products and calculate and charge the respective tax.

Tax classes can be assigned while creating new products as well as while editing existing products. To do so, please go to Catalog > Products and locate the product this Tax Class has to be assigned to.

When you find the product and access the Product Details page, under the "Price & Inventory" section, you are going to locate the "Tax class" field. All you have to do is select the appropriate Tax Class and click on the "Update product" button to apply the changes.

Now you are entirely ready to start selling your products and charge your customers the appropriate tax rates.

Although, it is always a good idea, not to say mandatory, to test the newly created Tax Classes on your storefront and ensure the tax rates are accurately calculated. Once you confirm it is all working as expected, you are all set.

We hope your new skills will come in handy in the future development and maintenance of your X-Cart Online Store. In case you do have any additional questions, please do not hesitate to contact our Support Team.