If your business is located in the US or Canada, you can enable automatic tax rates for your online store. Lightspeed eCom then generates the appropriate taxes based on the customer's shipping location.
IMPORTANT:
Click here if your store is located in Europe or Australia.
It is not recommended to have manual and automatic loads configured at the same time.
To ensure that you are charging the correct tax rates, it is recommended that you check with your local authority.
Set up taxes for the United States
preface
Enabling Automatic Taxes - Part 2
Change automatic tax by creating a custom tax
New York Custom Tax for Clothing
preface
To set up your tax correctly, take a look at some tax concepts for the United States. Lightspeed eCom uses a customer's zip code to specify their district, province, city and state during checkout to charge the correct tax rates.
Nexus
In the United States, the requirement to charge taxes is based on nexus or sufficient physical presence. The definition of "sufficient physical presence" in a state varies from state to state. For example, in some states, advertising in that state means having a physical presence. In Lightspeed eCom, you need to create a tax location for each state where your business has nexus. It is recommended that you check with the state or a tax specialist to understand your tax requirements.
Destination or origin
To determine which taxes apply to purchases outside of provinces, cities, districts and states, use one of the following 3 models:
Destination - Used by most states. Taxes are based on the destination of the order.
For instance:
If a merchant in New York City sells to a Syracuse customer, Lightspeed eCom will charge the customer tax based on Syracuse rates.Origin - Use by a minority of states. Taxes are based on the location of the store.
For instance:
If a merchant in Philadelphia sells to a customer in Pittsburgh, Lightspeed eCom will charge the customer tax based on the Philadelphia rates.Mixed Origin - If you have an eCom store located in California, you can turn on the Mixed Origin settings. With these settings, state taxes are applied to all orders in California, and district taxes are applied only to orders within your store's district. Disable this setting to use the Destination tax model.
For instance:
If a merchant in Los Angeles sells to a customer in San Francisco, Lightspeed eCom will only charge the customer with California state tax. If the store's neighbor in Los Angeles places the same order, she pays state and district taxes.
Nexus in more than one state
In cases where your store's Nexus exists in more than one state, the model used to determine tax for out-of-state orders is always the destination model.
For instance:
A merchant has a nexus in New York and Pennsylvania. A customer from New York City makes an online purchase from Philadelphia. Lightspeed eCom charges customer taxes based on New York City rates.
Set up VAT
In your eCom Back Office, select Settings > Taxes.
Under TAX SETTINGS, the switch for All prices excluding tax/VAT should be on.
To make sure taxes are displayed in your cart and at checkout, turn on the switches for Show tax in cart and Show tax at checkout.
Make sure the option for Tax rate for new products is set to: Automatically calculate taxes.
Under AUTOMATIC TAX RATES, click on Change country selection to select a country.
In the list of countries, select United States.
The country is added to your automatically calculated tax rates.
Click Edit to add state tax.
Click Add a location.
In the Name box, give your location a name such as Warehouse or Main Store and enter the address. If you only have an online store, enter the address where you are located, such as your home address or that of your warehouse.
Repeat these steps for each location in a different state. If you have multiple locations in one state, you only need to enter one.
Change automatic tax by creating a custom tax
Depending on your products and your location, you may have tax exemptions. For example, many states have tax exemptions.
You can create tax groups for the products that are exempt from tax and use custom taxes to specify how much tax customers pay for a particular product. It is recommended that you check with the state or a tax specialist to understand the tax exemptions.
Create custom tax for some individual items:
Enable automatic taxes.
In the left menu of the back office, click on Settings > Payment settings > Taxes.
Click United States.
In Tax groups , click Add a tax group.
Give the tax group a name, such as Children's Clothing.
Click on the tax group you created.
Click on Add products to click on Choose next to each product to add it to the tax group.
Click on Save.
Click on Settings > Payments Settings > Taxes > United States and click Add custom tax and select the Tax Group that you have created.
Click on the custom tax and configure it.
For each state you want to apply the custom tax to, enter a rate and optionally change the name and tax type:
Combine with the federal tax: add the rate to the state rate.
Replacing the federal tax.
Aggregated with the federal tax: The federal tax is applied to the subtotal, then the adjusted tax is applied.
A custom tax for a group of items:
Enable automatic taxes.
In the left menu of the back office, click on Settings > Payment settings > Taxes.
Click United States.
In Tax groups, click on Add a tax group.
Give the tax group a name, such as Children's Clothing.
Enable Select a group of products by flipping the switch.
Select the button next to All products in store when adding all products in your store to this tax group.
Otherwise, select the button next to product group conditions and filter according to the products:
Category
Supplier
Brand
price
Scroll down to EXCLUDING PRODUCTS and click Add product to select products that you do not want to include in the tax group.
Click on Save.
Click in Settings > Payments Settings > Taxes > United States and click Add a custom tax and select the tax group you have created.
Under Custom taxes , click on the custom tax to configure it.
If you are located in New York State and your tax class is clothing, select Clothing under $110 at Tax Rules New York .
Enter the rate under Tax Rates for each state where you have a store.
You can optionally apply the rate to all areas and cities for each state.
New York Clothing Tax
In the Custom Taxes screen, there is a feature in the TAX RULES section called New York Clothing Under $110. If you sell goods in New York State that is exempt from the tax, you can use this setting to quickly create a custom tax.
By activating the switch for New York Clothing below $110, tax exemption is applied when:
You added your products to a tax group and that tax group is selected in your custom tax.
The price of the product at checkout is $110, before tax and after discount.
Order will be shipped to an address within New York State.
Due to different local tax laws, the amount of the tax exemption varies by region in New York State. The automatic loads are designed to account for these differences. For example, in December 2015, clothing was taxed at 4% in the province of Albany, while no tax was charged in the province of Colombia.
It is recommended that you add all your tax exemptions to the tax group, despite the price. This way, no other setting is needed to apply the tax exemption when an item is discounted and the new price is less than $110. Click here for more information about adding many products to a tax group.
Combine filters when grouping products
When you create a tax group and need a filter, adding more than one filter allows you to define more specific product sets.
When combining filters, only products to which all filters apply are included in the collection.
For instance; a user adds two category filters: children and t-shirts. The only products to which this applies are products that have both children and t-shirt assigned.
Disable Custom Taxes
Disable a custom tax, after it has been created, for periods when a custom tax is not needed.
In your eCom Back Office, click Settings > Taxes.
Select United States or Canada.
In the CUSTOM TAX section, click on the custom tax you want to disable.
Turn off the switch next to Enable Custom Load in the TAX GROUP section.
Set up taxes for Canada
Introduction
Enter your address
Enabling Automatic Taxes - Part 2
Change automatic tax by creating a custom tax
Introduction
Lightspeed eCom's auto-tax feature is built with the complete database of applicable taxes for each province, including GST/PST, GST/QST, GST only, and HST only. The automatic tax function is also designed for the Canadian destination tax model. This means that Lightspeed eCom correctly determines the tax rate for the destination province for each order.
For instance:
If a merchant in Ontario sells to a customer from British Columbia, Lightspeed eCom will charge the customer with British Columbia taxes.
REMARKS:
When you sell to customers in provinces and territories where your business is not located, the obligation to collect VAT may vary. While Lightspeed is designed to take these different tax rules into account, you should check with the county or a tax specialist to confirm whether VAT is due.
For example, if your business is located in Ontario, but you sell to customers in Quebec, Quebec has no obligation to pay Quebec sales tax (QST) and Lightspeed will not charge the customer QST in the order.
If you are not required to collect taxes on certain products, you must add your products to a tax group and adjust the taxes charged for this product. Click here for more information.
Enter your address
In the eCom Back Office, select Settings > Company.
Scroll to the CONTACT INFORMATION section and next to Select a country to display the relevant fields, select the Netherlands.
Enter your address. In the Zip code (Postal code) field, enter the zip code.
Click Save.
Enabling Automatic Taxes - Part 2
In the left panel of the back office, click on Settings > Payment Settings > Taxes.
Click on Change country selection to select a country.
In the list of countries, select Canada.
The country is added to your automatically calculated tax rates. Optionally, you can click Edit to view the tax rate for each province.
Change automatic taxes by creating a custom tax
Depending on your products and your location, you may have tax exemptions. In Canada, for example, many medical products are not taxed.
You can create tax groups for the products that are exempt from tax and use custom taxes to specify how much tax customers pay for a particular product.
It is recommended that you check with the state or a tax specialist to understand the tax exemptions.
Create custom tax for some individual items:A custom tax for a group of items:Combine filters when grouping products
When you create a tax group and need a filter, adding more than one filter allows you to define more specific product sets.
When combining filters, only products to which all filters apply are included in the collection.
For instance; a user adds two category filters: children and t-shirts. The only products to which this applies are products that have both children and t-shirt assigned.
Disable Custom Taxes
Disable a custom tax, after it has been created, for periods when a custom tax is not needed.
In your eCom Back Office, click Settings > Taxes.
Select United States or Canada.
In the CUSTOM TAX section, click on the custom tax you want to disable.
Turn off the switch next to Enable Custom Tax in the TAX GROUP section.