Product Tax Classes

According to your country’s laws, you may need to charge different taxes for different types of products. For instance, you may need to calculate sales tax differently for alcohol and non-alcohol products.

Using the tax class functionality in X-Cart 5 you can organize your products into groups according to what sales tax rate calculation rules need to be used for them.

For example, if you have a food store selling both alcohol and non-alcohol products, and you need to calculate sales tax differently for those two groups of products, you will need two tax classes - one for alcohol products and one for non-alcohol products. To make it work, you will need to specify how tax rates should be calculated for each of these tax classes. You will also need to assign a tax class to every product in your store. This way all the products will have appropriate tax rates applied to them. 

In X-Cart 5, every product needs to have a tax class assigned to it. By default, new products are created with the Default tax class assigned. If you expect all of your store’s products to use the same tax rates, you do not need to create any additional tax classes - just use the Default tax class for all rates. However, if you are going to have different tax rates for different types of products - like in the example with alcohol and non-alcohol products - then you will need additional tax classes.

Tax Classes for Shipping

The tax classes feature can be used for shipping as well. Typically you create a tax class, set appropriate tax rates for it and assign the tax class to a shipping method via the Shipping methods section.

Creating Tax Classes

To create a new tax class:

  1. Open the Tax classes tab in the Taxes section (Store setup > Taxes) of your X-Cart Admin area:  tax-class-new.png

  2. Click the New tax class button. This adds a new blank field below. tax-class-blank.png

    You can click more than once to add multiple fields.

  3. Use the field you have added to enter a name for the new tax class (e.g. “Alcohol” on the sample) and Save changes: tax-classes-alc.png

That’s all, the tax class has been created: tax-class-created.png

Now you can configure tax rates for it. 

Configuring Rates for Tax Classes

To configure a tax rate specifying a tax class:

  1. Go to the Taxes section (Store setup -> Taxes) of your X-Cart Admin area and, depending on the tax system you are using, open the appropriate tax configuration tab (Sales tax / VAT/GST / Canadian taxes).

  2. Click the New rate button. new-rate.png

  3. Provide the tax rate information you require. new-rate-1.png

    • Zone : Select the address zone to which the tax rate should apply.
    • Tax class : Select the tax class to which the tax rate should apply.
    • Rate : Specify the tax rate (in %).

    Note for Sales Tax addon users: To set up a tax rate that will be used exclusively for shipping, use the section Tax rates on shipping cost. Tax rates configured via this section are not applied to products.

  4. Click Save changes. tax-class-1.png

That’s it. Now you can assign the created tax rate to a product or to a shipping method by assigning the tax class with this rate to them.

Assigning Tax Classes to Products

Once a tax class has been created, it can be assigned to products. Any products to which this tax class is assigned will use the tax rates defined for this product class.

To assign a tax class to a product:

  1. In the Catalog -> Products section of your X-Cart Admin area, choose a product to which you need to assign a tax class and open this product’s details page for editing.

  2. In the Prices & Inventory section of product details, locate the field Tax class and select the tax class you want to assign to this product. xc5_taxclass_tax_class_assign.png

  3. Click Update product to save the changes.

The tax class will be assigned.

If you need to assign a tax class to more than one product, you may find it convenient to use the “Bulk Product Edit” feature.

Assigning Tax Classes to Shipping Methods

Once a tax class has been created, it can be assigned to shipping methods.

To assign a tax class to a shipping method:

  1. In your store’s Admin area, go to the Shipping methods section (Store setup > Shipping).

  2. In the list of shipping methods, locate the column Tax class. shipping_tax_classes.png

    This column shows the tax classes currently assigned to your store’s shipping methods. Shipping methods for which no tax class has been assigned manually will have the Default tax class assigned.

  3. To change the tax class for a shipping method, click on the name of the tax class currently assigned to it. This will reveal a drop-down box with a list of available tax classes. Select the tax class you require.

  4. Save the changes.

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