Promotions and Taxation

When creating promotions, consider the effects of tax calculations.

Tax rates are determined as follows:

Promotion Class Tax
Product

Uses the tax rate of the related product line item.

For example, if a product line item has a 5% tax rate, the same tax rate is used for the price adjustment.

Order

Calculates a mixed tax rate from all product line items in the cart.

For example, the merchandise initial price is $105 and the merchandise discounted price is $100. The tax rate set for all order-level price adjustments is (105 / 100) - 1 = 5%.

Shipping

Uses the tax rate of the standard shipping line item in the shipment.

For example, if a tax rate of 3% is set for the standard shipping line item, the same tax rate is used for the shipping price adjustment.

Note: These rules are implemented in CalculateCart.ds (see SiteGenesis Application for Promotions). Customize these rules to meet your specific business requirements.

If you need an alternative way to calculate tax for line items in an order, for example, if your back-end systems can't handle order-level discounts, see Line Item Tax Basis.

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