Setting Up Tax Groups Using Automatic Tax Calculation
6 min read
Make sure you're compliant with tax regulations for items that are taxed at special rates. For example, if you sell clothing for both children and adults, but children's clothing is tax-free, you can create a tax group for the kids clothes. That way, all your products are taxed at the correct rate in each location.
Step 1 | Determine which items have special tax rates
Each tax location has a standard sales tax rate. However, certain items may be taxed at lower or higher rates. Moreover, some goods may be exempt from taxation altogether.
For instance, a country with a general tax rate of 10% may tax children's car seats at 5%. To account for this difference, a merchant in this location would need to create a car seat tax group, assign the relevant Avalara code (in this example, "Child car seats & restraints"), and then add the relevant products to this group.
Special tax rates vary by country and can vary by state, province, etc. These tax rates also change over time. We suggest you consult with an accountant or with your local tax authority to find out if any of your products are taxed at a special rate.
Step 2 | Create a tax group
You create a tax group by giving it a name, assigning it an Avalara tax code, and saving it. Make sure to give it a name that makes it easy for you to identify. Customers do not see the group name.
- If you previously created tax groups using the manual method, you do not need to create new tax groups. Simply add Avalara tax codes to any groups you already created.
- It's not currently possible to create tax groups for Wix Bookings services.
To create a tax group:
- Go to Tax in your site's dashboard.
- Scroll down to Tax groups.
- Click +Add Custom Group.
- Enter a name in the Group name field.
- Select an option from the Avalara Tax Code drop-down:
- Select one of the preset groups (e.g. Cosmetics).
- Click + More Tax Codes:
- Enter a search term (e.g. car seats).
- Click to select the relevant tax group and click Select.
- Click Add.
After setup, you'll see the tax group you created listed with your default tax groups.
Step 3 | Add items to the group
Now that your tax groups are set up, you can assign items to your groups. For example, if you created a tax group for children's clothing, you can add all the relevant children's clothing products you sell to that group.
To assign items to your tax group:
Choose the items you want to add to a tax group:
Add store products to a group
Add restaurant menu items to a group
Instructions for merchants with both Wix Stores and Wix Restaurants
Click a question below to learn more about tax groups.
What happens when I create a new item after setting up tax groups?
What happens when I remove a tax group?
What happens if a group of items has a special rate in one location but not another?
What do customers see at checkout when purchasing items taxed at different rates?
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