If your business is located in the United States or Canada, you can enable automatic tax rates for your online store. Lightspeed eCom will then generate the appropriate taxes, based on each customer's shipping location.

IMPORTANT:

• If your store is located in Europe or Australia, click here.
• It is not recommended to have manual and automatic taxes configured at the same time.
• To ensure you are charging the correct taxes, it is recommended you contact your local government.

Introduction

Lightspeed eCom's automatic tax feature is built with the complete database of applicable taxes for each province, including GST/PST, GST/QST, GST only and HST only. Also, its automatic tax feature is designed according to Canada's destination tax model.

This means that Lightspeed eCom correctly defines the tax rate for the destination province of any order. For example, a merchant in Ontario sells to a customer living in British Columbia. Lightspeed eCom will charge the customer British Colombian taxes.

NOTES:

1. When selling to customers in provinces and territories where your company is not located, the requirement to collect sales taxes will vary. Although Lightspeed is designed to account for these various tax situations, contact the province or a tax specialist to confirm if you need to collect taxes.
   • For example, if your company is located in Ontario, but you sell to customers in Quebec, Quebec won't require you to pay QST, so Lightspeed will not charge the customer QST on the order.
2. If you are not required to collect taxes for specific products, you will need to add your products to a tax class and override the taxes charged for these products. For more information, click here. 

Entering your address

1. In your eCom Back Office, select Settings > Company.
2. Scroll to the CONTACT INFORMATION section and beside Choose a country to display the relevant fields: select Canada.
3. Enter your address. The Zip code field will support your postal code.
4. Click Save.

Enabling automatic taxes

1. In your eCom Back Office, select Settings > Taxes.
2. Under TAX SETTINGS, the switch for All prices exclude tax should be toggled on.
3. To ensure taxes appear in your cart and checkout, toggle on the switches for Show tax in cart, and Show tax in checkout.
4. Ensure the option for Tax rate for new products is set to: Calculate taxes automatically.
5. Under AUTOMATIC TAX RATES, select Change country selection.
   
   
6. From the list of countries, select Canada. The country is added to your automatically calculated tax rates.
7. Optionally, select Edit to view the tax rate for each province. 
   
   

Changing automatic taxes by creating a tax override

Depending on your products and your location, you may have tax exemptions. For example, in Canada, many medical supplies are not taxed.

You can create tax classes to identify products that have particular tax rate or exemption. Then you can use tax overrides to specify how much tax customers should pay for those products.

It is recommended you check with the province or a tax specialist to understand tax exemptions.

To override the tax for a few individual items:

1. Enable automatic tax rates.
2. On the left menu of the Back Office click Settings > Payment Settings > Taxes.
3. Click Canada.
4. From Tax Classes click Add a tax class.
5. Give the tax class a name, such as Children's clothing.
6. Click the tax class you created.
7. Click Add products to click Choose beside each product to add them to the tax class.
8. Click Save.
9. From Settings > Payment Settings > Taxes > Canada and click Add a tax override and select the tax class you created.
10. Click the tax override and configure it.
11. For each province that you want to apply the override to, enter a rate, and optionally change the name and tax type:
    
    • Combine with the federal tax: add the rate to the country's rate.
    • Replace the federal tax.
    • Compounded with the federal tax: the federal tax is applied to the subtotal, then the tax override is applied.

To override the tax for a group of items:

1. Enable automatic tax rates.
2. On the left menu of the Back Office click Settings > Payment Settings > Taxes.
3. Click Canada.
4. From Tax Classes click Add a tax class.
5. Give the tax class a name, such as Children's clothing.
6. Enable Select a group of products by toggling on the switch.
7. Select the radio button beside All products in the shop if you're adding all your products in your shop to this tax class.
8. Otherwise, select the radio button beside Product group conditions and filter according to the product's:
   • Category
   • Supplier
   • Brand
   • Price
9. Scroll down to EXCLUDE PRODUCTS and click Add product to select products you don't want to be included in the tax class.
10. Click Save.
11. From Settings > Payment Settings > Taxes > Canada and click Add a tax override and select the tax class you created.
12. Click the tax override and configure it.
13. For each province that you want to apply the override to, enter a rate, and optionally change the name and tax type:
    
    • Combine with the federal tax: add the rate to the country's rate.
    • Replace the federal tax: Use the new rate instead of the federal rate.
    • Compounded with the federal tax: the federal tax is applied to the subtotal, then the tax override is applied.

Combining filters when grouping products

When you're creating a Tax Class and you need to filter, adding more than one filter will define a highly specific set of products.

• When combining filters, only products that apply to all the listed filters will be included in the collection.
• For example, a user adds two category filters called Children and T-shirts. The only products this would apply to are products that have both Children and T-shirt assigned to them.

Disabling tax overrides

For periods of time that a tax override is not required, turn off a tax override once it's created.

1. In your eCom Back Office click Settings > Taxes.
2. Select United States or Canada.
3. In the section TAX OVERRIDES, click the tax override you want to disable.
4. In the section TAX CLASS, Beside Enable tax override, toggle off the switch.