13 Configure Tax Processing

Retail Digital Commerce integrates with Vertex O Series to automatically calculate sales tax in the shopping cart.

If you process taxes with a different tax processor, you can use webhooks to integrate with your tax processor so it calculates taxes in the shopping cart. You can also disable all tax processor integration if you use an external service to handle tax processing.

Some shoppers may have tax exempt status for certain purchases. For example, individuals working for a charitable organization may be exempt from sales tax on items used in running the charity. To learn how to configure Retail Digital Commerce and your tax processor to handle tax exemptions, see Integrate with an External Tax Processor.

If you run multiple sites within a single instance of Retail Digital Commerce, these sites share the same tax processor settings, but each site can have its own ship-from address. See Run Multiple Stores from One Retail Digital Commerce Instance for more information about creating sites.

If you are using a loyalty program, you can configure tax processing to convert to and from loyalty points currency. For information on loyalty programs, refer to Work with Loyalty Programs.

Understand Tax Processor Integrations

Retail Digital Commerce does not configure taxes, but integrates with tax processors that calculate sales tax in the shopping cart.

You must have an active account for the tax processor you choose to integrate with Retail Digital Commerce, including for the built-in Vertex integrations.

Retail Digital Commerce automatically uses the tax processor you have enabled to calculate taxes for every order placed on your store. The tax processor calculates sales tax as part of the pricing operation. When the shopping cart is priced with a request to include tax pricing (when the shopper begins the checkout process and when the order is submitted), Retail Digital Commerce sends the order information to the tax processor, which calculates the total tax amount and sends it back to Retail Digital Commerce. The response breaks down the tax into individual components, for example, the total tax amount might include sales tax assessed by both the state and county. Widgets on the checkout page automatically display the tax information.

Retail Digital Commerce is not involved in the settlement process and is not the system of record for any aspect of orders, including taxes. Retail Digital Commerce issues Sales Order calls (instead of Invoice calls) to tax providers to get the tax in a response.

Retail Digital Commerce uses a fallback method for calculating taxes when it cannot connect to your tax processor’s web service in the event of an outage. See Monitor tax processors for details about fallback tax calculation and information about configuring its settings.

If you want to display SKU prices with tax included, for example prices that include VAT, create a price group for those tax-inclusive prices. See Configure Price Groups for more information. If your store uses price groups with tax-inclusive prices, you may need to update your account on your tax processor’s site. For example, if your store uses tax-inclusive prices, you must activate Avalara AvaTax with Global for your AvaTax account.

Understand the Tax Code Property

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

Tax processors that integrate with Retail Digital 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 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; Retail Digital 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.

Configure the Vertex O Series Integration

Retail Digital Commerce uses the tax processing settings you add when you configure the integration when it communicates with Vertex during tax calculations. See Understand tax processor integrations for overview information about all tax processor integrations.

You must have an active Vertex O Series account to use this integration. To learn how to sign up for an account and configure it, go to http://www.vertexinc.com.

Important:

As a merchant, it is your responsibility to add the appropriate tax jurisdictions to your Vertex O Series taxpayer profile. (You set up your taxpayer profile in the My Enterprise section of Vertex Central.) Jurisdictions you add to your taxpayer profile tell Vertex O Series where and when to calculate and report tax. All sales that occur in jurisdictions you have not configured in Vertex O Series result in a tax calculation that returns a value of zero tax. Retail Digital Commerce is not responsible for configuring or validating jurisdictions. You can find information about nexus and tax jurisdictions in the Vertex documentation, which is available when you log into Vertex Central.

Before you begin, make sure you have the following information for your Vertex O Series account on hand:

  • The taxpayer code.
  • The trusted ID.
  • The username and password.

To configure the Vertex tax processing settings, follow these steps:

  1. Click the Settings icon, then select Tax Processing.
  2. Select Vertex from the Tax Processor list and select the Enable Tax Processor checkbox.
  3. (Optional) Select Show Tax Summary to display an order’s tax amount in the cart, checkout, and order summary pages, or deselect it to hide the tax summary. This checkbox is selected by default.

    If your store’s prices include tax, such as VAT, you likely do not want to display the tax summary. However, if prices to not include tax, you should always display a tax summary.

    This setting has no effect on the display of the tax summary in the emails your store sends to customers. To learn how to remove the tax summary line from the order summaries in emails, see Customize tax display in templates.

  4. Enter your Vertex Account Information.
  5. Click Save.

The following table describes the Vertex Account Information properties.

Property Description
Trust ID Your Vertex Trusted ID.
Merchant ID Your unique merchant ID.
Username The username for your Vertex O Series account.
Password The password for your Vertex O Series account.
URL The dedicated host-instance URL you received from Vertex.

Integrate with an External Tax Processor

If you have an account with a tax processor other than Vertex O Series, you can configure an integration that tells Commerce to use your tax processor to perform tax calculations.

To learn how to integrate with another tax processor, see Configure Tax Processors.

Configure Ship from Warehouse Locations

The Ship from Warehouse Location properties specify an address from which items sold on your store are shipped.

The tax processor uses this information when calculating taxes.

  • In Vertex O Series, this address is referred to as the physical origin.

If you run multiple sites within a single instance of Retail Digital Commerce, each site can have its own ship-from address. For example, suppose you run two sites, one that sells items in the United States, and another that sells items in France. For the US store, items would ship from your warehouse in Chicago; for the French store, items would ship from your warehouse in Paris.

Although tax processor settings take effect immediately, changes to the ship-from address must be published. This is because they are associated with a site, not with a tax processor.

To configure the Ship from Warehouse Location settings, follow these steps:

  1. Click the Settings icon then select Tax Processing.
  2. If you run multiple sites from a single Retail Digital Commerce instance, select the site whose address you want to configure.
  3. Enter your Ship from Warehouse Location Information.
  4. Click Save.
  5. Publish your changes.

The following table describes the Ship from Warehouse Location properties. Retail Digital Commerce does not validate any of the address details; for example, it does not check to make sure the Postal/ZIP Code you entered is valid for the Province/State.

Property Description
Country The country where the ship-from warehouse is located.
Address Line 1 First line of the address where the ship-from warehouse is located. For example, 1000 Smith Street.
Address Line 2 Second line of the address where the ship-from warehouse is located. For example, 4th Floor.
Address Line 3 Third line of the address where the ship-from warehouse is located. For example, Suite 403.
City Name of the city where the ship-from warehouse is located. This property is required if no Postal/ZIP Code is specified.
Province/State Province or State where the ship-from warehouse is located. This property is required if no Postal/ZIP Code is specified.
Postal/ZIP Code Postal/ZIP code for the ship-from warehouse location.

Disable All Tax Processors

If your tax calculations are handled externally, such as in your order management system, you can disable all tax processor integrations that calculate tax in the shopping cart.

To disable all tax processor integrations, follow these steps:

  1. Click the Settings icon, then select Tax Processing.
  2. In the Tax Processors list, select None.
  3. Click Save.