Add Additional Tax Classes and Custom Tax Rules in WooCommerce

How to Add Additional Tax Classes and Custom Tax Rules in WooCommerce

Running a WooCommerce store, you must be worried about the tax rules to be applied to the store. You aren’t always doing business with people within a particular city or a state or a country. Your customers can be from two blocks next to your store, or someone miles away from the city. It is important that the tax rules you apply adhere to all factors, starting with the state to a product, and quantity of the product.

In case you aren’t sure how to add additional tax rules or custom-fit tax classes within your online store, the article will help you with the same. And if you want immediate expert help instead of learning the process, reach out to WPCustomify.

Understanding Tax Classes

To begin with, let’s see what exactly we mean by tax classes and what they are used for. Let’s assume that currently, your store has the option of automated taxes enabled. What this does is that it automates the process of tax calculation and will be added to the checkout page without any hassle.

Sounds good, right?

Now if at any point in time you wish to customize the tax rates or basically target rates based on the geographical location, you would need to modify the settings. This is where the idea of tax classes come into play. Tax classes are specific tax is assigned to the cart depending on the region. For instance, a customer from New York will have a different tax rate as compared to a customer from Chicago.

An easy way out here is to add locations in a spreadsheet and upload the same to the WooCommerce store. This will help you determine and set tax rates for each of them. As it appears to be, specifying tax rates or creating different tax classes is an arduous job and you might feel the need to have a tax professional take over the job.

Well, you can simply consult your tax department to look over the rates. Once you are through, you can then go ahead with adding tax classes within the online store.

Adding A Tax Class

Follow the steps given below to create a new tax class and add it to your WooCommerce store.

Adding A Tax Class

Start with logging in to the WooCommerce store and move down the dashboard.

  • Hover around the dashboard and on the left side of the same, click on Settings.
  • The page that opens will have multiple options. Since we are to create a new tax class, click on the Tax tab.
  • Move down the page to the section that says, Additional tax classes.
  • You will find two names already listed there. Remember that you can have only one tax class per line. So move down to the third line and type the name of the tax class that you wish to add and configure for the WooCommerce store.
  • Once you are done with typing the name of the tax class, make sure you hit on the Save changes tab.
Additional tax classes Settings

Simple as it may sound, we have now added a new tax class to the WooCommerce store. The next step is to configure the same or customize it as per your likes. Move to the top, and click on the link of the tax class that we just defined.

If we assume that the created was named Class A Tax, you will find a link at the top with the same

Class A Tax

The page will have a few fields that you need to fill in to configure the tax class and set it for your online store.

configure the tax class

Note that you can always modify the settings of the store to determine whether or not the shopping page displays the tax applied.

Display Prices During Cart and Checkout

Similar to the above, you can also decide whether you have the taxes displayed on the checkout page or you omit it. This accounts for the two names, including tax and excluding tax.

Let’s understand this through an example. The two images given below will shed light on what looks like the tax-inclusive price and the ones without taxes.

tax-inclusive price

If you see, the image above has the price printed just adjacent to the total tag. Below, we have a text that says includes tax. This means that the final price displayed has a tax amount added to it.

includes tax

On the other hand, this image has two separate rows. One specifies the tax amount and the other lists the total. Note that the total doesn’t have the tax amount added. This is tax exclusion from the price.

Price Display Suffix

Price Display Suffix Settings

Similar to the option of whether you want to display the tax or not, we have something called, display suffix. Let’s assume that you plan to have the amount displayed on the product page. With the price display suffix, you can have a customized text displayed adjacent to the amount.

Product price display suffix

The image here clearly specifies the total amount of the product at $3. Just beside we have a text that says inclusive of taxes. You can similarly modify the settings to omit the suffix and display only the product price.

Display Tax Totals

Lastly, we have the option to Display Tax Totals on the checkout page. What this does is helps you specify if you need to display the final amount as a whole or say the total tax amount as one or list them separately. Click on the drop-down to select the same.

Display Tax Totals Settings

Click on the Save changes button to finally implement the same.

How to set up tax rates?

Now that you are well aware of the modifications that can be done with respect to tax rates on the WooCommerce store, let’s move to the part where we discuss how to set up a tax rate.

Considering that you are under the tax column of the settings tab, you will find all of the tax class names displayed. Click on the one that you wish to customize.

Note that you can also edit an already existing and configured tax class as and when needed.

Once you click on the tax class, select insert row. As evident, there are several columns. We go through them one after the other to configure the class.

Country Code – The first one is the country code. If you wish to apply the tax rule to a specific country, enter the code. Leave blank (*) to apply the rule to all countries.

State Code – Next to the country code, we have the state code. Similar to the above, simply type in the two-digit state code. If the rule applies to all states in the country, leave the space blank.

ZIP/Postcode – The next field is zip/postcode specific to the tax region. Now, it is possible that there are multiple postal codes. Hence, what you can do is enter the codes and separate them with a semicolon. Resort to wild characters to enter codes within a range or all with the same initials.

City – The fourth one is the city where the tax rate applies. Similar to the postcode, enter the name of the cities and separate them using a semicolon. If the tax rule applies to all, leave the same blank.

Rate % – Enter the rate with four decimal places. For example, if the tax rate is 7%, enter 7.0000.

Tax Name – Enter the name of the tax that will be displayed on the shopping page or the product page.

Priority – Now we set the priority of the tax rates. If there are one or more rates that apply to the same checkout, you would need to specify which rule would outnumber the others.

Compound – In case you wish to have the current tax rate to superimpose on the others, you can select the checkbox here.

Shipping –Another thing to note is where you want the tax rate to be applied to the shipping charges as well. If yes, you can select the checkbox or leave it as it is to omit the same.

Rerun the settings and then click on the save changes button. You are now done with creating custom-fit tax rates for your WooCommerce store.

Tax Rate Example

Let’s assume that you wish to set a tax rate for all the customers in New York. So what we do is,

  • Move to the online store admin page.
  • Click on settings and then select tax.
  • Here, under the option of tax rates, enter the name of the class as NYTax.
  • Now, click on save changes.
  • Next, move to the top and click on the name of the newly created tax class.

Now we need to configure the tax class as seen above in order to implement the same.

  • Moving from left to right, we begin adding the information.
  • Enter the name of the country like the US.
  • In the next field, enter NY.
  • Since we apply the tax rate to all of the zip codes in New York, we leave that section blank.
  • We also leave the city column empty.
  • Next, we need to enter the tax rate. Let’s say we want the tax to be 7.5%. So the input here would be 7500.
  • Enter the tax name as standard.
  • Set the priority of the tax rate as 1 since we want it to apply no matter what.
  • Let’s assume that we want the rate to apply over all other rates for New York, we select the compound option.
  • In case you wish to apply the tax rate on the shipping charges as well, click on the checkbox.

Click on save changes to finally have the rate live on your WooCommerce store.

The Final Word

Adhering to tax rules and handling tax starting from the WooCommerce cart level minimize the additional work for the businesses later. While it may look like a complex task to set up additional tax classes in the beginning, this small step is going to simplify your business life in the long-term. So, make sure that you digitize taxes for your e-commerce business.