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VirtueMart single Tax Rate - How To tutorial

Like most of the Virtuemart functions, this is easy to configure, but not easy to understand the logic. So, we have written a tutorial to make it easier. This is for US Business owners with US customers and one tax rate.

Typically speaking, most US companies do NOT charge tax on items being shipped out of state. Technically, there are a variety of laws in different states related to this and so you should check with your accountant to be sure you comply with all local, state and federal tax laws. Assuming you only need to charge tax for a orders shipped in state, lets configure Virtuemart to charge tax ONLY to customers in your state.

1) Log into the back end > Admin > Virtuemart > Configuration
2) Select the Global Tab. About half way down the page are parameters for taxes. Set the Tax mode to be: Based On Shipping Address. Press Save.
3) In the VM sub-navigation of the VM control panel, look for the TAX link > Add New Rate.
4) Select your country (USA), select state, ad rate as decimal value. 8.25% = 0.0825
5) Save.

That's it.  Now, when a shopper from your state makes a purchase, they will be charged 8.25%.

Simple enough? Good.  But, now, when you ad a new product, there is a field called VAT which is used to calculate the GROSS price.  VAT = Tax Rate. You need to be aware of this.  When adding your products, set NET price to the price you want to charge and the GROSS price will be calculated automatically.

Frankly, we find this a bit confusing as US business owners do not think of TAX in the terms of Gross / Net.  We, at least Serr.biz and clients, tend to think of Gross / Net prices related to sale price and cost of item. Tax, we think of as robbery...uh, I mean, it's own line item. But, maybe in England, where the original VM developers are from, they think differently, obviously. But, now you know what it means, and can configure your tax rates accordingly.