Tax assets
In order to charge and collect taxes on the goods and services your store provides, a store created with WebSphere Commerce must include the following:
- Tax categories
- Calculation codes
- Jurisdictions and jurisdiction groups
The combination of the tax categories, calculation codes, and jurisdictions and jurisdiction groups create the tax charges for the store.
The following diagram illustrates the taxation structure in WebSphere Commerce Server.
- Tax category
-
Tax categories correspond to the different kinds of tax a store may be required to collect, such as federal, state or provincial, and municipal.
A tax category is part of one store entity, although a store entity may have several tax categories. If the store entity is deleted, the tax categories associated with that store entity are also deleted.
- Tax type
- A store typically collects two type of taxes: sales or use tax, and shipping tax. Each tax category has one tax type. Although each tax category may only be of one tax type, (for example the tax category federal is a sales tax type), several different tax categories may belong to the same tax type (for example, the tax type sales tax, applies to the categories federal, provincial, and municipal).
- Calculation code
- Calculation codes are used to calculate tax charges, that is, a tax calculation code indicates how tax is calculated for order items. In order to calculate tax on the order item, assign sales tax and shipping tax calculation codes to either a catalog entry or a group of catalog entries. Only one tax calculation code of each tax type can be applied to a particular catalog entry or group of catalog entries. Typically, sales or use tax is levied on the net price, and shipping tax is levied on shipping charges.
A calculation code is part of a store entity. A calculation code can only be associated with one store entity, but a store entity may have several calculation codes. If the store entity is deleted, the calculation codes associated with that store entity are also deleted.
- Calculation rules
-
Each calculation code has at least one calculation rule, which defines the calculations for each tax category, and specifies the conditions under which the calculations will be done. Each tax calculation rule is associated with a tax category, a jurisdiction group and a fulfillment center, which together define the conditions under which the calculation rule is used. For example, a different rule may be selected to calculate an amount for a particular tax category depending on the shipping address and fulfillment center specified in the order.
Each calculation rule belongs to exactly one calculation code.
A particular tax calculation code can have several calculation rules, one for each combination of tax category, tax jurisdiction group, and fulfillment center associated with the store. Each sales tax and shipping tax calculation rule can be associated with multiple TaxJurisdictionGroupCalculationRules (TaxRules). For example in the following chart, calculation rule 10001 is applicable to both jurisdiction groups 1234 and 1235.
TAXJCRULE_ID CALRULE_ID FFMCENTER_ID JURSTGROUP_ID PRECEDENCE 10001 10001 NULL 1234 0 10002 10001 NULL 1235 0 Each TaxRule defines the conditions under which the calculation rule should be applied. For example, you may define a calculation rule for each jurisdiction group to which the store ships. In the following example, calculation rule 10001 is applicable to both jurisdiction group 1234 and 1235.
In the following example, the tax calculation code uses calculation rule A for the provincial sales tax category, when the tax jurisdiction is Alberta, and rule C when the tax jurisdiction is British Columbia.
Tax jurisdiction Federal sales tax Provincial sales tax Alberta, Canada Calculation rule B, which gives Y% calculation rule A, which gives X% British Columbia, Canada Calculation rule B, which gives Y% calculation rule C, which gives Z% When a shipping address matches more than one tax jurisdiction group, the calculation rule with the highest associated TAXJCRULE.PRECEDENCE column value is used.
The association of TaxJurisdictionGroupCalculationRules (TaxRule) with a calculation rule determines when the calculation rule is applicable. A sales tax or shipping tax calculation rule is applicable when any one of the conditions given by the TaxRules is met. In the following example, calculation rule 10001 is applicable when you are shipping to jurisdiction group 1001, or when you are shipping from fulfillment center 1001, or you are shipping to jurisdiction group 1001.
CALRULE_ID FFMCENTER_ID JURSTGROUP_ID 10001 NULL 1001 10001 1001 1001 Each TaxJurisdictionGroupCalculationRule is associated with at most 1 jurisdiction group. Calculation rules themselves are not directly associated with jurisdiction groups.
- Jurisdictions and jurisdiction groups
- Jurisdictions are geographical regions or zones representing a country or region, province or territory, or zip code range, to which you sell goods. Jurisdictions are grouped together to form jurisdiction groups.
WebSphere Commerce supports two types of jurisdictions: shipping jurisdictions and tax jurisdictions. Each of these jurisdictions is part of a corresponding group, for example, shipping jurisdictions are in the shipping jurisdictions group and tax jurisdictions are in the tax jurisdictions group.
Jurisdictions and jurisdiction groups determine which calculation rules are used to calculate the tax charges.
Jurisdictions and jurisdiction groups are part of a store entity. Each jurisdiction and jurisdiction group is part of one store entity, however a store entity may have several jurisdictions or jurisdiction groups. If the store entity is deleted, the jurisdictions and jurisdiction groups associated with that store entity are also deleted.