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As a drop shipping business owner, it is your obligation to collect taxes on your sales, and remit those taxes to your government. In this article, we will show you how to set up taxes for your ShopBase store.

In this article

A. Set up tax rate for a country
B. Set up tax rate for a region
C. Set up tax overrides
D. Tax calculation

A. Set up tax rate for a country

Make sure your destination countries are set up in your shipping zones so that taxes can be applied correctly.

From your ShopBase admin site, go to Settings > Taxes.


In Tax regions section, select Add a new country.


In the pop-up, fill in all requirements to set up country tax.

Country (required): Enter the country you want to set up tax rate for.
Threshold: Enter the tax threshold. Tax will be imposed if order value is equal to or greater than threshold.
Tax name: Enter name which will show on the order detail in your store's admin. If this field is empty, the name is Tax by default.
Tax rate (required): Enter the tax rate imposed on orders shipped to this country.


Once finish, click Done.

B. Set up tax rate for a region

Tax collection can be set up for a specific region, state, or province in some countries.

From Taxes page, click Manage in the country you want to set up tax for.


In State/Province section, click Collect tax.


In the pop-up, fill in all requirements to set up region tax.

State/Province (required): Select the state/province you want to set up tax rate for.
Threshold: Enter the tax threshold. Tax will be imposed if order value is equal to or greater than threshold.
Tax name: Enter name which will show on the order detail in your store's admin. If this field is empty, the name is Tax by default.
Tax rate (required): Enter the tax rate imposed on orders shipped to this state.


Once finish, click Done.

If both country tax and region tax are set up, region tax will be used for tax calculation. For example, if you set up 5% tax rate for the United States as country tax, and 8% tax rate for California as region tax, orders shipped to California will be imposed 8% tax.

C. Set up tax overrides

If you want to set up tax rates for specific product collections or categories, you should set up tax override. To set up a tax override, create a collection for the products, and then apply the override on that collection.

Country tax must be set up prior to tax overrides.
From Taxes page, click Manage in the country for which you want to add the tax override.


In Tax overrides section, select Add product override.


In the pop-up, fill in all requirements to set up tax override.

Collection (required): Search and select a collection that needs an override.
Location (required): Select where you want the override to apply.
Threshold: Enter the tax threshold. Tax will be imposed if order value is equal to or greater than threshold.
Tax name: Enter name which will show on the order detail in your store's admin. If this field is empty, the name is Tax by default.
Tax rate (required): Enter the tax rate imposed on the products in the collection.

If tax overrides, region tax, and country tax are set up for a product, tax override will be used for tax calculation.

D. Tax calculation

From your ShopBase admin site, go to Settings > Taxes.



In Tax calculation:


By default, no option is selected, sales tax will be calculated based on the order's subtotal.

How this option is displayed in your store's checkout page
Tax will be calculated using the formula: Tax = [Order subtotal - Store discount (if any)] x Tax rate.

How this option is displayed in your order's detail page

If you want sales taxes to be included in the order's subtotal, select Show all prices with tax included. With this option enabled, tax is already included in the order's subtotal, therefore, you should adjust your product price to cover the tax accordingly.

How this option is displayed in your store's checkout page
Tax will be calculated using the formula: Tax = [(Order subtotal - Store discount if any) x Tax rate] / (1 + Tax rate).

How this option is displayed in your order's detail page

If you want to include both order's subtotal and shipping fee in the tax calculation, select Charge tax on shipping rates.

How this option is displayed in your store's checkout page
Tax will be calculated using the formula: Tax = (Order subtotal + Shipping fee) x Tax rate.

How this option is displayed in your order's detail page

If you want sales taxes to be included in both order's subtotal and shipping fee, select both Show all prices with tax included and Charge tax on shipping rates. With both options enabled, tax is already included in the order's subtotal and shipping fee, therefore, you should adjust your product price and shipping fee to cover the tax accordingly.

How this option is displayed in your store's checkout page
Tax will be calculated using the formula: Tax = Tax of product + Tax of shipping = {[(Order subtotal - Store discount if any) x Tax rate] / (1 + Tax rate)} + [(Shipping fee x Tax rate) / (1 + Tax rate)].

How this option is displayed in your order's detail page

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