etting Up a Fixed Product Tax (FPT) in Magento CE 1.8 and EE 1.13

Table of Contents

Note: This article provides information about how to set up tax calculations in Magento Community Edition (CE) and Enterprise Edition (EE). The information is based on CE 1.8 and EE 1.13; some options here might not apply to earlier versions.

Important: No guarantee is offered with respect to any of the information given here. Please contact an expert before you make any decisions about tax matters.

Overview

Some tax jurisdictions have a fixed tax that must be added to certain types of products. Magento lets you set up a fixed product tax (FPT) for use in your store's tax calculations. For example, in some countries FPT can be used to set up a WEEE tax, also known as "ecological tax" or "eco tax," that is collected on certain types of electronics to offset the cost of recycling. This tax is a fixed amount, rather than a percentage of the product price.

Your tax jurisdiction might also have rules about how you display the price of products to your customers, either with or without tax. Be sure you understand those rules so that you can set your FPT display options accordingly.

Fixed Product Tax (FPT) Calculation

Fixed product taxes are applicable at an item level based on the product. In some jurisdictions this tax is subject to an additional % tax calculation.

FPT taxed/not taxed Display setting and associated calculation
FPT is not taxed
  • Excluding FPT: Treat FPT as a separate row in the cart and include the value of FPT in the appropriate tax calculations.
  • Including FPT: Add FPT to the base price of an item but is not included in tax-rule-based calculations.
  • Excluding FPT, FPT description, final price: Display item prices without FPT, FPT amount, and with FPT included. FPT is not included in tax-rule-based calculations.
FPT is taxed
  • Excluding FPT: Treat FPT as a separate row in the cart and include the value of FPT in the appropriate tax calculations.
  • Including FPT: Include FPT in the price of an item, and no change to tax calculations is required.
  • Excluding FPT, FPT description, final price: Display item prices without FPT, FPT amount, and with FPT included. FPT is included in tax-rule-based calculations.

Note: How you set the option to Display Prices in Sales Modules and Display Prices in Emails can affect customer confidence in their orders. For example, if you choose to display Order Review prices without showing FPT, customers who buy items with associated FPT will see a total that includes the FPT tax amount, but they will not see an itemized entry for this amount. This might cause abandoned carts if your customers see an order total that does not match what they expect, based on an itemized list of products in the order.

Step 1: Enable the FPT Tax

To enable FPT:

  1. From the Admin panel, select System > Configuration.
  2. In the Configuration panel on the left, under Sales, select Tax.
  3. Click to expand the Fixed Product Taxes section.
    The section displays the set of options shown in the following figure.
  4. Enter the following information:
    Option Description
    Enable FPT Click Yes.
    Display Prices In Product Lists Specifies how prices display in products lists, such as the category page.
    Display Prices On Product View Page Specifies how prices display on the product page.
    Display Prices In Sales Modules Specifies how prices appear in the Order Review section during checkout, and in the Items Ordered section of a sales order.
    Display Prices In Emails Specifies how prices display in the sales e-mail confirmation that is sent when an order is placed.
    Settings for:
    Display Prices In Product Lists
    Display Prices On Product View Page
    Display Prices In Sales Modules
    Display Prices In Emails
    Click one of the following:
    • Including FPT only to display in the cart a price that includes a fixed product tax, but not a description of the tax.
    • Including FPT and FPT description to display in the cart a price that includes a fixed product tax and a description of the tax.
    • Excluding FPT to display in the cart a price that does not include a fixed product tax.
    • Excluding FPT, FPT description, final price to display in the cart a price that does not include FPT, but display the FPT amount and subtotal on separate lines.
    Apply Discounts To FPT

    Click Yes to apply discounts to the fixed product tax amount.

    Click No to apply discounts to the base price of a product without the fixed product tax included.

    FPT Tax Configuration

    (Available in EE 1.13.1 and later only). Determines how FTP tax is calculated as follows:

    • Not Taxed: Click this option if your taxing jurisdiction does not tax FPT. (For example, the state of California does not tax FPT.)
    • Taxed: Click this option if your taxing jurisdiction does tax FPT. (For example, Canada taxes FPT.)
    • Loaded and Displayed with Tax: Click this option if FPT is added to the order total before applying tax (for example, in EU countries).
    Apply Tax to FPT

    (Available in EE 1.13.0.x and earlier only).

    Click Yes to apply tax to the fixed product tax amount.

    Click No to apply tax to the base price of products without the fixed product tax included.

    Include FPT In Subtotal

    Click Yes to include fixed product tax in the shopping cart subtotal.

    Click No to display fixed product tax under the shopping cart subtotal and is not included in the subtotal itself.

  5. If you select Excluding FPT, FPT description, final price, the following figure shows what your customers see on the shopping cart page.

  6. When complete, click Save Config.

Step 2: Create a Fixed Product Tax Attribute for Products

To create the attribute:

  1. From the Admin panel, select Catalog > Attributes > Manage Attributes.
  2. To add a new FPT product attribute, click the Add New Attribute button in the upper right.
  3. In the Attribute Code field, specify a unique identifier for this attribute. Do not use spaces or special characters. However, you can use hyphens or underscores. The maximum length is 30 characters. In this example, eco_tax is the attribute code.
  4. In the Scope field, select the level at which the values of this attribute are shared, as shown in the following table.
    Option Description
    Global The value of this attribute for a given product must be the same throughout your website.
    Website The value of this attribute for a given product can differ on different websites, however it cannot differ between store views contained under the same website.
    Store View The value of this attribute for a given product can differ on all websites and all store views. For example, if you were creating an attribute called Color, with a Store View scope, you would be able to set the color of a product to green in one store view, and blue in another store view.
  5. In the Catalog Input Type for Store Owner field, select "Fixed Product Tax."
  6. In the Apply To field, click one of the following options:
    • All Product Types
    • Selected Product Types: If you select this option, a list shows the product types to which you can apply this attribute.
  7. Click Save Attribute.

The following figure shows the New Product Attribute for the Fixed Product Tax.

Step 3: Assign the FPT Attribute to an Attribute Set

To assign the new attribute to an attribute set:

  1. From the Admin panel, select Catalog > Attributes > Manage Attribute Sets.
  2. In the Manage Attribute Sets area, click the name of the attribute set in which you want to include the FPT attribute. This example uses the Default attribute set.
  3. The Edit Attribute Set 'Default' area displays a list of Groups and a list of Unassigned Attributes. Find your FPT attribute (eco_tax in this example) in the unassigned list and drag and drop it into the attribute group where you want it to appear.
  4. Click Save Attribute Set.

In this example the eco_tax attribute is included the General attribute group, as shown in the following figure.

Step 4: Apply the Fixed Product Tax to Products

To apply the FPT to products:

  1. From the Admin panel, select Catalog > Manage Products.
  2. For the product to which you want to add the FPT, click the Edit link in the Action column.
  3. In the Eco Tax section, set the scope for the tax and the countries and states in which this tax will apply. Depending on the choices you make, the input fields change to accommodate the details of where the tax will apply.
  4. In the Tax box, enter the amount for the Fixed Product Tax.
  5. To add more countries or states to which to apply the FPT, click the Add Tax button. You can apply a different amount for the tax for each locale where it applies.
  6. When finished, click Save.

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