How Taxes are calculated
Taxes can be collected on "product", "handling", and "Shipping" totals at checkout, and those three fields can be calculated in three different ways: Auto, Flat Percentage, and Exempt.
Tax Rates
Auto: The tax will automatically be assessed based on the zip code of the location selected in the "Distribution" section of the Settings page or the customer's shipping address.
Group Pickup at --> Zip code of branch selected
Allow In-store Pickup --> Zip code of branch selected
Allow Shipping --> Zip code of customer's shipping address (If you do not have nexus in a customer's shipping address then no tax will be collected)
Flat Percentage: You enter in the percent you want to collect in taxes, regardless of the zip codes.
Tax Exempt: Taxes will not be collected when "Tax Exempt" is selected.
1) Product: The tax will be calculated on the "Subtotal" at checkout
2) Handling: If you are collecting a handling fee (either a percentage or a dollar amount), the tax will be calculated on the handling total at checkout
3) Shipping: If shipping is an option as a distribution method, the tax will be calculated on the shipping amount generated at checkout
The sales tax is only given one line item at checkout. The customer will not know exactly where the tax is calculated on.