how to charge taxes on shipping & handling?

SparkySparky Member
Hi there,

In the tax configuration, there's an option to apply taxes to shipping & handling. As far as I can tell, this only kicks in if the product ALSO has a sales tax. From the popup helper:
"If checked, then when this tax applies to a product, it will also be collected on the amount charged for shipping and handling."


How do I charge sales tax (and show the tax amount) on shipping for a tax-exempt product? Most of my products are "zero-rated" for sales tax but GST should be charged for shipping.
Thanks!
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Comments
  • fc_adamfc_adam FoxyCart Team
    @Sparky,

    Interesting question - we don't currently support taxes that don't apply to the item cost but do apply to shipping.

    Would it be possible to get some more information on this particular tax set up, where it is from and what the requirements are? I can't say that I've heard of a tax applying only to the shipping like that before.
  • SparkySparky Member
    Thanks Adam!
    Almost everything in Canada is subject to 5% GST, the federal Goods & Services Tax with some provinces also having a provincial sales tax or Harmonized Sales Tax (HST). GST is applicable for shipping and handling and postage.

    The issue that I'm running into is that COFFEE is considered a staple / grocery item so is zero-rated for GST. Technically, it is taxed but at 0% rather than the standard 5%.

    Most of the time, it isn't a problem for me because the shipping is free and is part of the coffee cost. The issue is just when people pay for expedited shipping or a special shipping charge which then picks up the 0% tax-rate from the coffee.

    I'm not surprised this hasn't come up before because very few items are exempt or zero-rated.

    Would one way around this be to add the shipping charge as a separate item (more like a product) to the shopping basket? It's not an urgent problem, just trying to get it sorted to avoid issues with the tax man. Thanks again!
  • fc_adamfc_adam FoxyCart Team
    edited June 9
    @Sparky,

    Thanks for the additional information. Do you have any documentation you're aware of around this? We'd love to dig further into this to see what could be involved.

    In terms of a way to approach it now - the best approach would probably be what you noted there: including the shipping costs as a separate line item that belongs to a category that is taxed at the full amount. Would that work for your store set up?
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