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  1. #1
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    Idea or Suggestion Configuring Taxes for Canadian Sites/Zones

    You might find this helpful ... it needs a bit of touching-up, but the basic core is there:
    ########################################

    ** THE CONTENTS OF THIS ARTICLE ARE RELEASED UNDER GPL and CREATIVE COMMONS ***

    Vendors operating in Canada need to accommodate numerous tax configurations to support proper tax collection on sales to customers in provinces where they are registered to sell.
    There's a Federal GST, HST, and provincial PST/RST.

    Tax Zones / Rates configuration can be a little confusing at times, as the terms are easily and accidentally swapped ... by mistake... thus it's sometimes hard to follow the process through completely.

    Hopefully this short article will help clarify.
    Some contents originally written by Peter Mosier
    Revised for clarity by DrByte

    =========================
    Understanding Terminology
    =========================
    TAX CLASS = A setting assigned to PRODUCTS and to SHIPPING that's used to calculate final taxes.
    TAX ZONE = A regional setting used to help determine tax rates by geography.
    TAX RATE = A rate calculated by combining a product's tax class and shipping zone with the relevant tax percentage.

    Zen Cart uses SHIPPING ADDRESS to determine appropriate taxes, i.e. which TAX ZONE you are shipping into. NOTE: this is the shipping address, and *NOT* the billing address.

    A TAX RATE is determined by comparing SHIPPING ADDRESS to the Tax ZONE set up for the TAX RATE; and also by Tax Class assigned to each product.

    You can only assign ONE TAX CLASS to a product.
    In many stores, you will only have one TAX CLASS (GST/HST/PST) since all goods are either taxable or non-taxable.
    When would you use different rates? One example would be if, say, CLOTHES were taxed at a different rate than BOOKS which are in turn different from DVDs. You could create a different TAX CLASS for each family ("class") of product in that case.

    In the following examples, we will be dealing with only ONE tax CLASS for products.
    You likely want the GST for SHIPPING to show up separately, so we will make a separate "TAX CLASS" for "GST on Shipping".

    In Zen Cart you can set it to split out your taxes to show on separate lines on the customer's order/invoice/receipt.
    Or you can have it add all taxes together and just show tax as one subtotal on a single line.

    *******************************************************
    Best part is: IT DOESN'T REQUIRE ANY CONTRIBUTIONS!!!!!
    Just a careful setup of the zones.
    *******************************************************

    ===================
    Step-by-Step SETUP:
    ===================


    STEP (1): Set the location for your store:

    Configuration --> My Store

    - Country: Canada
    - Zone: Ontario

    ========================================================

    STEP (2): Create the "Tax Zones". The are geographical regions where a particular set of tax laws applies

    [FONT="Courier New"]Locations/Taxes --> Zones Definitions[/FONT]

    Create the Zone for all of Canada
    - Zone Name: Canada GST Zone
    - Description: GST (except HST Zones)

    Now click on the newly created "Canada GST Zone" row to drill down one level to "Sub Zones"
    Click INSERT to create 8 new sub-zones, one at a time:

    - Country: Canada; Zone: Alberta
    - Country: Canada; Zone: Manitoba
    - Country: Canada; Zone: Northwest Territories
    - Country: Canada; Zone: Nunavut
    - Country: Canada; Zone: Prince Edward Island
    - Country: Canada; Zone: Quebec
    - Country: Canada; Zone: Saskatchewan
    - Country: Canada; Zone: Yukon Territory


    ==============

    Click on "BACK" to go up one level.
    Now create the Ontario HST Zone:
    Click Insert

    - Zone Name: Ontario HST Zone
    - Description: HST (only when shipping to Ontario)

    Now click on the newly created "Ontario HST Zone" row to drill down one level to "Sub Zones"
    Click INSERT to create new sub-zone:

    - Country: Canada
    - Zone: Ontario

    ==============

    Click on "BACK" to go up one level.
    Now create the BC HST Zone:
    Click Insert

    - Zone Name: BC PST Zone
    - Description: PST (only when shipping to BC)

    Now click on the newly created "BC PST Zone" row to drill down one level to "Sub Zones"
    Click INSERT to create new sub-zone:

    - Country: Canada
    - Zone: British Columbia

    ==============

    Click on "BACK" to go up one level.
    Now create the Maritimes HST Tax Zone:
    Click Insert

    - Zone Name: Eastern Canada - HST Zone
    - Description: NS, NB, NL, PE

    Now click on the newly created "Eastern Canada - HST Zone" row to drill down one level to "Sub Zones"
    Click INSERT to create new sub-zone:

    - Country: Canada; Zone: Nova Scotia
    - Country: Canada; Zone: New Brunswick
    - Country: Canada; Zone: Newfoundland
    - Country: Canada; Zone: PEI

    ==============

    Do NOT create a separate Tax ZONE for Shipping. You will simply use the "Canada" tax zone for the GST Shipping tax CLASS (below).

    *** Important: this means that SHIPPING GST will only be charged to destinations within Canada, but NOT charged on exports. According to Canada Customs & Revenue Agency (1-800-959-5525), you do *NOT* charge GST on the shipping fee for EXPORTS.


    ========================================================

    STEP (3): Create the "Tax Classes"

    Note: You can only assign ONE Tax CLASS to a product.
    But since we want shipping GST to show up separately, we will make a separate Tax CLASS just for shipping.

    Locations/Taxes --> Tax Classes

    create TWO (2) tax classes:

    - Tax Class Title: GST/HST/PST Class
    - Description: All taxable goods

    - Tax Class Title: GST on Shipping
    - Description: GST on shipping within Canada

    ========================================================

    STEP (4): TAX RATES

    Here is where it all comes together: Tax Rates.
    Tax RATES associate Tax ZONES & Tax CLASSES to determine the correct Tax Rate.

    HINT: The "DESCRIPTION" is what shows up on the invoice, so use it judiciously!!!!!!!!!!!!!

    Locations/Taxes --> Tax Rates

    create SEVERAL Tax Rates:

    - Tax Class Title: GST/PST/HST Class
    - Zone: Canada GST Zone
    - Tax Rate (%): 5.0000
    - Description: 5.0% GST#99999 99999 RT0001
    - Priority: 1

    /*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


    - Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
    - Zone: Ontario HST Zone
    - Tax Rate (%): 13.0000
    - Description: 13.0% HST (Ontario)
    - Priority: 1
    /*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!

    - Tax Class Title: GST/PST/HST Class /* HINT: Yes, this is the same one you just used
    - Zone: Eastern Canada - HST Zone
    - Tax Rate (%): 15.0000
    - Description: 15% HST#R99999 9999 RT0001
    - Priority: 1
    /*HINT: Insert your Tax Number (RST) as part of DESCRIPTION and it will show up on invoice !!!


    Repeat as necessary for the various provinces in which you are registered.


    That takes care of taxes on products. And now, the Shipping taxes:

    - Tax Class Title: GST Shipping Class
    - Zone: Canada GST Zone
    - Tax Rate (%): 5.0000
    - Description: 5.0% GST on shipping
    - Priority: 1

    - Tax Class Title: GST Shipping Class
    - Zone: Ontario HST Zone
    - Tax Rate (%): 13.0000
    - Description: 13% shipping HST#99999 9999 RT0001
    - Priority: 1

    - Tax Class Title: GST Shipping Class
    - Zone: Eastern Canada - HST Zone
    - Tax Rate (%): 15.0000 (Contact your local revenue office for correct percentage!)
    - Description: 15% shipping HST#99999 9999 RT0001
    - Priority: 1

    (Repeat if you have are registered for specific provinces with other tax rates for shipping)

    /* HINT: The above will calculate PST on shipping. Although there might
    /* be a tendency to think of shipping as a PST exempt service, in fact
    /* the Ontario Ministry of Finance says that for calculating the PST,
    /* "The total selling price includes delivery, mailing, transportation, or
    /* handling charges, but does not include the GST". With the above set-up,
    /* the PST for the shipping gets calculated (albeit separately).
    /* If you wanted them calculated together, you could assign "GST/PST/HST Class"
    /* as the Tax Class when setting up the shipping method.
    /* Personally, I prefer to break it out separately.

    ========================================================

    STEP (5): Specify the appropriate Tax Class for SHIPPING MODULES

    MODULES --> SHIPPING

    Edit whichever shipping module(s) you are using.

    Tax Class: GST Shipping Class

    /* SEE PREVIOUS HINT

    ========================================================

    STEP (6): Specify the appropriate Tax for PRODUCTS

    This may take some time....

    CATALOG --> Categories/Products

    Drill down to each product. Click EDIT

    TAX CLASS: "GST/PST/HST CLASS"


    ==============
    The following SQL statement would be helpful:
    --------
    Code:
    UPDATE products SET products_tax_class_id = 1 WHERE products_model NOT LIKE 'GIFT%';
    (you'd need to confirm that the desired products_tax_class_id = 1, first )
    ========================================================

    ===============
    Example Output:
    ===============

    Shipping to Ontario:

    Sub-Total: $69.00
    Per Item (Best Way): $10.00
    13.0% HST (Ontario) RST #99999 9999 RT0001: $8.97
    13.0% HST (shipping): $ 1.30
    Total: $89.27

    Shipping to Canada, but to a zone where *only* GST applies:
    Sub-Total: $69.00
    Per Item (Best Way): $10.00
    5.0% GST # 99999 9999 RT0001: $ 3.45
    5.0% GST (shipping): $ 0.50
    Total: $82.95

    Shipping to non-Canada (tax exempt) zone:
    Sub-Total: $69.00
    Per Item (Best Way): $10.00
    Total: $79.00
    Last edited by DrByte; 31 Jul 2013 at 03:25 AM. Reason: update with some 2013 information
    .

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  2. #2
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    Thanks alot, should help me out alot!

  3. #3
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    Ya...this is pretty good...and a bit tricky...thanks a lot for your time with this.

  4. #4
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    Great info. Thanks. Very helpful.
    Cheers.

  5. #5
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    What do you if one of the things your store sells is books - which are not PST-taxable (at least, not in Ontario)? You can't charge all taxes on everything if some of your products are not supposed to be taxed the PST...

  6. #6
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    Create an additional Tax Class called "GST Only".
    Create a new tax rate for "GST Only" and set the tax rate for it.
    Then edit the book products and set their tax class to "GST Only"
    .

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  7. #7
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    Do I create it just for the Canada GST zone, or for that and the HST zone, or what? I'm presuming I don't set it for the PST zone, since then it would add it to whatever's set for the GST zone, right?

  8. #8
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    That depends on your tax-collection requirements for your business.
    I'd check with your tax accountant about who to charge.
    I think I'd be inclined to link it to the Canada GST Zone
    .

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  9. #9
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    Default

    i just followed the instructions and i'm getting gst + pst + gst again on my end totals

    i wonder what's wrong


    and on my shipping i'm getting GST + GST + PST



    yeah i'm lost on this one as soon as i make the gst tax rate it doubles it up at the checkstand



    as soon as i deleted the subzone manitoba it worked like a charm

  10. #10
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    Default Re: Configuring Taxes for Canadian Sites/Zones

    sorry for another post but i just wanted to let everyone know that i had canada allzones et-up so it would double up the gst everytime another zone would come up.

    got rid of the all zones and all the subzones worked fine

 

 
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