We have built tax rates based on ZIP codes for all 50 American states. We have since learned that we need to tax FREIGHT for the destinations states that require it, and not for the states that don't. We cannot figure a tax rule that would accommodate this or any method to add freight tax according to the destination state. Has anybody dealt with this before, or have an idea how we might accomplish this?

thank you!!

  • Have you heard of TaxCloud? Free APIs that handle sales tax everywhere in the US, including whether shipping is taxable or exempt in different states. Oct 27, 2013 at 22:07

1 Answer 1


It's super easy to do this with stock Magento - set up your tax zones by state, then create a rule for shipping tax with the same priority as your other tax rate rules for the state as per your requirement.

To get to this menu navigate to Admin > Sales > Tax > Manage Tax Rules

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