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

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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.

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Step-by-Step SETUP:
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STEP (1): Set the location for your store:

Configuration --> My Store

• Country: Canada
• Zone: Ontario

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

Locations/Taxes --> Zones Definitions

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.

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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

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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.

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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

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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"

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The following SQL statement would be helpful:

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 )

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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

Thanks alot, should help me out alot!

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

Great info. Thanks. Very helpful.
Cheers.

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... :(

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"

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?

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

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

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

Is there no way to separate the GST and PST onto two separate lines?

sae:

Is there no way to separate the GST and PST onto two separate lines?
Not built-in at the present time.

Just an update for everyone, as of yesterday (July 1st, Canada Day) our GST will be reduced to 6%. Google turned up this quick link: http://sbinfocanada.about.com/b/a/257235.htm

go figure, I'd only find this out after I've already configured for 7% just yesterday, HA!

Ya, I changed mine.

Hello,

Any idea how taxes are configured if the store / business is in Ontario, and it ships to both within Canada and the US? It appears to me that since the sale goes outside of Canada no GST/PST/HST is charged.

thank you,

Daniel

I charge tax to everyone (but I am expecting to have all my sales within Canada).

You can do what you are describing by "zones" Set up a US zone and a Canada zone. Then apply the tax only to the Canada Zone.

Hey Canadians!

just a tip, as of july 1, 2006, Canadian GST is reduced to 6 percent. Dont forget to change your stores.

--Ben

grossd:

Hello,

Any idea how taxes are configured if the store / business is in Ontario, and it ships to both within Canada and the US? It appears to me that since the sale goes outside of Canada no GST/PST/HST is charged.

thank you,

Daniel
Daniel, the general rule of thumb as far as I've seen to this point is that if the sale SHIPS to a region for which you ARE registered to collect taxes, you collect them. Otherwise, you do not.

And, usually you only register to collect taxes in the states/provinces in which you have physical DOB addresses.

Naturally, there are always exceptions which vary by industry, and a consultation with your tax professional (accountant) should clarify these issues for you.

I'm setting up a store for a client in Quebec where they have their PST applied on top of the GST.

I used the same setup as noted for Ontario (which I have working super fine on my cart) but it's not charging ANY taxes for Quebec at all when I test it.

I set up the Zones as noted in the instructions and set the Quebec PST to be priority 2 so that it would charge the 7.5% on top of the 6% GST.

I have created 2 test products - one which should have both taxes charged and one that should be PST only.

When I test using a shipping address in Ontario, it charges me 6% GST as it should. :) When I test using a shipping address in Ontario, it should be charging me (on a 10.00 GST/PST item and a 10.00 PST item):

GST: $0.60
PST: $1.55

It comes up with NO TAXES at all.

Is it because the postal shortform is different? IE. it could be QC or PQ? I also tried Quebec in my address...

Thanks!

http://67.19.186.2/~azure

Jennie

While following the very helpful directions written here (Thank you!) I have somehow converted all of my shopping cart buttons to a 'contact us' button link to the "contact us" page. Does anyone know if this is a coincidence? I have also been altering some of the html to customize my pages, maybe that is actually the source of the problem.

Any help would be greatly appreciated.