# All Tax Zones

This screen displays all Tax Zones.

Tax Zones are simply geographical physical address areas that your organization must collect tax from, for all or some of your Products.

Taxes are based on either the location of the Shipping Addresses of each Recipient, or the Billing Address of each Customer during the checkout process.
Taxes are calculated as a percentage of the Order Subtotal. Any shipping fees are excluded from tax calculations.
TIP: If some of your Customers are Tax-Exempt, you can prompt them during the checkout process and the Tax will not be calculated, displayed, or collected for that Order. Your Site Manager can enable this feature in the Site Settings.
TIP: If none of your Customers are taxable, or none of your Products are taxable, then you can completely disable tax from all Commerce Pages and Orders. Your Site Manager can enable this feature in the Site Settings.
IMPORTANT: Tax Zones must not overlay each other.

## Creating Tax Zones

To create a Tax Zone, click "Create Tax Zone".

## How Tax is Calculated

Both the Billing and/or the Shipping Addresses are considered in the calculation of tax for each Order. Only "taxable" Products will be included in any tax calculations.
For each taxable Product in the Cart, taxes will be accumulated as follows:

- For Products that are "shippable", the sum of all taxable Products for each recipient in the Cart is computed:
  Destination Tax = ((Product Price - Product Discount) * Product Quantity) * Tax Percentage from the Tax Zone of the Shipping Address.
- For Products that are NOT "shippable", the sum of all taxable Products in the Cart is computed:
  Purchaser Tax = ((Product Price - Product Discount) * Product Quantity) * Tax Percentage from the Tax Zone of the Billing Address

Therefore, the total Order Tax = Destination Tax + Purchaser Tax