Tax Lines in Cart Module

In this document, you’ll learn about tax lines in a cart and how to retrieve tax lines with the Tax Module.

What are Tax Lines?#

A tax line indicates the tax rate of a line item or a shipping method. The LineItemTaxLine data model represents a line item’s tax line, and the ShippingMethodTaxLine data model represents a shipping method’s tax line.


Tax Inclusivity#

By default, the tax amount is calculated by taking the tax rate from the line item or shipping method’s amount, and then adding them to the item/method’s subtotal.

However, line items and shipping methods have an is_tax_inclusive property that, when enabled, indicates that the item or method’s price already includes taxes.

So, instead of calculating the tax rate and adding it to the item/method’s subtotal, it’s calculated as part of the subtotal.

Note: The following diagram is a simplified showcase of how a subtotal is calculated from the taxes perspective.

For example, if a line item's amount is 5000, the tax rate is 10, and tax inclusivity is enabled, the tax amount is 10% of 5000, which is 500, making the unit price of the line item 4500.


When Are Tax Lines Recalculated?#

When you use the Cart Module in the MedusaGo application, Medusa recalculates a cart's tax lines automatically as the customer builds and updates their cart. So, in most cases, you don't need to manually recalculate them.

Whether Medusa recalculates the tax lines depends on the automatic_taxes setting of the cart's region:

  • If automatic_taxes is enabled, Medusa recalculates the affected tax lines automatically when the cart changes.
  • If automatic_taxes is disabled, Medusa only calculates tax lines when you send a request to the Calculate Cart Taxes API route.

Tax Lines Require a Shipping Address#

Regardless of the automatic_taxes setting, Medusa only calculates tax lines once the cart's shipping address has a country code. Until you set the shipping address's country, the cart's line items and shipping methods have no tax lines.

Medusa determines the tax rates from the country in the cart's shipping address, not from the list of countries in the cart's region. So, a region with multiple countries doesn't have a default country for tax calculation. Medusa calculates each customer's taxes based on the country they set in their shipping address.

Note: If the cart's region has only one country, Medusa sets that country as the cart's shipping address country when creating the cart. So, Medusa can calculate tax lines without the customer setting their address. For a region with multiple countries, the customer must set their shipping address's country before Medusa calculates tax lines.

Tax Recalculation by Cart Operation#

The following table explains how each cart operation affects the cart's tax lines when automatic_taxes is enabled:

Operation

Tax behavior

Add a line item

Medusa calculates the tax lines of the new item.

Add a shipping method

Medusa calculates the tax lines of the new shipping method.

Update the cart's region or locale

Medusa recalculates the tax lines of all the cart's items and shipping methods.

Update a line item's quantity

Medusa doesn't recalculate tax lines. Instead, it derives the new tax amounts from the item's existing tax rates.

Remove a line item

Medusa doesn't recalculate the tax lines of the cart's other items.

Note: To force Medusa to recalculate a cart's tax lines, even when automatic_taxes is disabled, send a request to the Calculate Cart Taxes API route. This also triggers a fresh calculation from your third-party tax provider, if you use one.

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Edited Nov 14·Edit this page