As an admin, you can set taxes for your Dokan Cloud marketplace. To do this, go to your admin dashboard and click on the “Tax” button under the Settings option. You can adjust the tax rate for different product categories and set different tax rates for different countries.
Let’s learn how to customize tax as an admin:
On the Tax settings page, there are mainly two options- Country and Tax Class.
- Country: Suppose, you want to sell products to the United States. You need to click on “Add Country”. There you will find your desired country, or, you can also search for the country name using the search option. Once you have added the country name, the name appears on this page under the Country tab.
- Tax Class: A tax class is a collection of tax rates. If you click on the Tax Class, there you will find the tax classes that you have added while adding a tax country which are usually Reduced Rate, Standard Rate, and Zero Rate. You can also create a tax class from the “+Create Tax Class” option.
Now let’s assume you want to sell products to Florida state of the United States. So, you need to configure the tax settings for the Florida state under the country – United States option.
To do that Click on the “+Add State” button, then find the Florida state. Click on the state name and hit the Continue button.
Now you need to set the Florida state tax rules. To do that, first, give it a name using the Tax Name option. Then set the tax rates.
If you want to collect tax on the shipping charge, tick the box next to “On Shopping”. Also, if your product is a digital product and you want to collect tax for it, just click on the “On Digital Product” option.
There is another option called “Compound tax applied”. Before tick on the yes box, let us tell you what is a compound tax.
Compound Tax
In the United States, “compound tax” typically refers to a tax system where taxes are applied successively on top of each other. This means that tax is calculated not just on the original amount but also on the tax itself, resulting in a compounding effect.
One common example of compound taxation in the U.S. is sales tax. When you purchase an item subject to sales tax, the tax is added to the purchase price.
If the sales tax rate is, for example, 10%, then for every $100 of purchase, $10 is added as tax, making the total $110. If another 10% tax is applied to this new total, it would result in $11 tax being added, making the total amount $121, and so on.
So, if you want to collect compound tax for the city where you want to sell, just check the Yes button under the “Compound tax applied” option.
In the US, there are many cities under a single state. And every city has different tax rates. So, you need to configure the tax rules for every city under a state.
To do that click on the “Collect Citywide tax”. There you will find the options to set tax names, rates, and other settings.
After completing that, now you need to add zip tax. There are different zip codes in a single city. So, if it requires to pay taxes for different zip codes, you need to configure that.
To do that, click on the “+Add Zip Tax” option. Then add the City Zip Code Range, Tax Rate, etc.
Find the zip code range for that city and configure it following the below screenshot.
Now you are done. Click on the “Save Changes” button to save all the changes!
If you want to configure tax rules for another city, just click on “Add City” and follow the same procedures that we just have shown you.
Congratulations! You have successfully added tax rules for the Florida state.
You can anytime edit this tax rule by clicking on the edit button next to the Action button.
Assign Tax to Products as an Admin
After creating the tax rules for a specific country, now you need to assign those tax rules to different products.
It can be done in two ways. You as an admin can assign tax to different products. Or, if a vendor wants to assign tax to his products, he can do that as well.
As an admin, go to the All Products section, then choose a product to assign tax for that product.
After choosing a product, scroll down a bit, there you will find the option called “Tax Class”. Choose a tax class from the dropdown menu and hit the Update button.
Since we have created the Standard Rate tax class for this tutorial, so, we are choosing the Standard Rate class from the dropdown menu.
That’s all. That’s how an admin can assign tax to a product.
Assign Tax to Products as a Vendor
Now as a vendor to assign tax to your products, you need to go to the All Products tab. Then choose a product to assign tax for that product.
Now scroll down a bit, and assign the tax class. Finally, hit the Update button.
That’s it!
How Taxes Work on the Checkout Page
After assigning taxes to different products, now it’s time to check if the taxes are working correctly or not.
Try to buy that product as a customer, and go to the checkout page. Before filling in the Shipping Address, if you check the Tax number, you’ll find it as to be calculated.
After filling in the Shipping Address, the tax amount will be automatically calculated. If you check the Order Summary, you will get the amount.
So, this is how Dokan tax works.