Understand the Tax Code property

Each product and shipping method you create in Commerce has a Tax Code property.

This section applies to Open Storefront Framework (OSF) and Storefront Classic.

Tax processors that integrate with Commerce use the value of the Tax Code property when they calculate tax for each product or shipping method. The value you enter for the Tax Code depends on your tax processor.

• For Avalara AvaTax, it is the Avalara tax code, also called goods and services type. For example, if your store sells gift cards, the value of the gift card product’s Tax Code property can be the Avalara tax code for Gift Certificates or Electronically Delivered Gift Cards. For more information about tax codes in AvaTax, go to the Avalara Help Center at https://help.avalara.com and search for tax codes.
• For Vertex O Series, it is the code you assigned to a taxability category in Vertex O Series. For example, if your store sells gift cards, the value of the gift card product’s Tax Code property is the code you assigned to the Gift Certificates/Cards tax category in Vertex O Series.

Tax Code is not a required property; Commerce allows you to leave Tax Code blank when you create a product or shipping method. However, it is best practice to assign a Tax Code to every product and shipping method you create. Otherwise, the tax calculations may return unexpected results, such as a higher-than-anticipated tax amount. For example, if you leave a product or shipping method’s Tax Code property blank, Vertex calculates the tax at the maximum rate that guarantees compliance.