Magento Question About Applying Sales Tax Based on Amount of Purchase

I received a question about how to configure Magento to apply sales tax to only purchases that are above a speficied amount. The question and my answer are below.

Question

Hello William Rice,

Ref Article: http://www.packtpub.com/article/creating-tax-rules-in-magento

First of all your article is really cool and help full. I gone through all the steps, but i'm unable to figure out how to set TAX based on Product cost?

I'm interested to learn how can we define TAX based on 'The amount' of the purchase. For example, some places tax clothing purchases only above a specific amount.

Criteria is like this:

• TAX should be calculated if Product cost is higher than 150$.


• if Product cost is less than or equal to 150$, TAX will be ZERO.


• TAX Rate is 5.50%.

Could you please guide me how can i implement above criteria in Magento?

Thank You,

-Shahil

Answer

Shahil,

The most expedient way to apply a tax rate based upon a product's price, is
to create a product class for the products in that price range. In your
example, you would need to create a tax class for those items, such as
"Clothing items costing$150 and above." Then, you would apply that tax
class to all of the clothing items costing $150 and above.

This means you would need to search through your catalog, find every
clothing item that costs $150 or more, and apply the product class to that
item. To find all these items:

1. Go to Catalog > Manage Products.


2. The top row of the catalog listing, the one that is shaded in blue,
   is for your search criteria.


3. For Price, enter From 150 To a very large number.


4. You might also use the Attrib. Set Name field to find your
   clothing. It depends on how you have your catalog set up.


5. Click Search and you will see the results.


6. Using the check boxes to select all of the relevant clothing
   products.


7. From the Actions drop-down menu select Update Attributes. Then
   click Submit.


8. This brings you to an Attributes page. Whatever you change and save
   on this page, happens to all of your selected products.


9. Select the tax class "Clothing items costing$150 and above."


10. Save.

Note that when you change a clothing item's price, you'll need to also check
its tax class. This will just need to be part of the store admin's job. We
all would like to see functions like this automated, but until Magento lets
you include the price in a tax rule, this will require intervention by the
store administrator.

Hope this helps. Good luck in your e-commerce endeavors.

Regards,
William Rice