We only charge sales tax to states where we have a physical store. Some states in the US require us to charge tax on shipping (a service, not a product) and some do not.
How can I specify which states Magento should charge tax for shipping to, and which not to charge shipping tax to?
I haven't been able to find an extension that does this, and all my searching results in Magento Go knowledgebase articles.
Does anyone else have a way to do this, or do you just charge tax on all or none of the shipping, regardless of state/region?
Best Answer
This article is for Magento 1.8, but this hasn't changed much between 1.6 and 1.8.
http://www.magentocommerce.com/knowledge-base/entry/ce18-and-ee113-tax-config-us
EDIT: Answer from below: So I think I understand the problem, and I think stock functionality should do this. You create two Tax Rules (tax with shipping, and tax without shipping_, and either select just "taxable goods" or select both "taxable goods" and "shipping."