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Load the Setup tab and click on Tax Rates
Note: tax rates are not attached to any geographic location (they are assigned to Tax Codes which define their geographic location)
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On the Tax Rates page click the Add button to add a new Tax Rate
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Populate the Tax Rate details:
Name: the name of the tax
Display Name: how the tax rate will be displayed when presented on an invoice
Rate: the tax rate. For instance entering 0.06 would setup a tax rate of 6%
GL Code: allows you to attach a GL Code to the tax rate for reporting purposes
Tax on Tax: allows you to configure this tax to be applied on top of taxes already applied to a charge. See the Advanced Taxing – Tax on Tax article for more information
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Click Save
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Return to the Setup tab and load Tax Codes
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Click on an existing code to edit it and add the Tax Rates (shown below GST and PST were added to the Ontario Tax tax code)
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Next, you can apply the tax code to a service (if required) by selecting the service and clicking the Add button under the Components section. You can directly apply a tax code to a service, a service tax category, or simply choose tax exempt here. Any account receiving this service will be taxed based on that setting regardless of their geographic location
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Add an Account as well as a Billing Contact to the account. Billing Contact must have an Address specified
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When you add a package to the account, it will calculate the taxes based on the billing address
The taxes in this case were 6% GST and 8% PST
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