Infusionsoft can automatically calculate and apply sales tax to online and offline orders. You will set up the sales tax rules and then designate individual products and subscriptions as taxable. You can add Country, State, and City types of sales tax. These settings are determined by the tax laws of your country, state, and city. You will need to contact the tax authorities to ask for guidance about which products are taxable and the sales tax percentages.
Table of Contents:
How Taxes are Calculated
Taxes are calculated based on addresses. The first address used to determine tax authorities is the contact's shipping address. This can be collected in the shopping cart checkout or if an existing contact matches the first, last, email, etc then it will use their shipping address. This is located on the Contacts Record on the "Address" tab.
The next address used - if the shipping address is missing either country, state, city - then the billing address for the credit card used in the order (not from an existing credit card address)
The final address used will be the contact's billing address. This should not be used in the case of a shopping cart checkout since whatever is entered on the checkout page will be used as the card's billing address. In this case it would be for manual (when the shipping fields are empty), Action Set, or through the API.
To Enable Sales Tax by default
- Go to E-Commerce > Settings > Orders.
- Set Default Charge Tax? to Yes.
Enable Sales Tax in the Shopping Cart & Order Forms
- Go to E-Commerce > E-Commerce Setup
- Click on Shopping Cart Settings
- Check the box to Charge sales tax.
Configure the regional tax options on each product.
- Go to E-Commerce > Settings in the main navigation menu.
- Click on Sales Tax in the settings menu.
- Select a tax type from the drop down: Country, State, or City. Each type of tax is added individually.
- Country: Select a country from the drop-down and enter the tax percentage for that country.
- State: Enter the state 2 letter abbreviation and the tax percentage for that state. Note: Canadian business can use this field to set up province taxes.
- (Optional) Compound: Set compound to Yes if you want the country tax applied to the taxable subtotal before the state tax is calculated.
- City: Enter the city name and tax percentage for that city.
- (Optional) Compound: Set compound to Yes if you want the country and state tax applied to the taxable subtotal before the city tax is calculated
- Click Save to add the new sales tax.
Note! The Country, State, and City names are case and spelling sensitive. Meaning that if you have the State Tax setup as "AZ" and an order is submitted is "az", the tax will not be applied. The same goes for if the order is submitted with "Arizona" instead of "AZ".