You can set up a different types of tax classes ,tax rates, and bringing them together into the tax rules. You can also define product tax classes and assign them into the product(s). Tax rules are combination of product tax class, customer tax class, tax rates, shipping address and amount of the purchase.
Below steps for add and manage tax classes in your Magento store.
• Login to your Magento admin panel.
• Open the Sales menu and click on Tax option. Once you click on that you will see another sub menu. You have to select Product Tax Classes from the submenu.
• Product Tax Classes are types of product(s) that is being purchased. It includes two product tax classes
o Taxable Goods
o Shipping
To add new product tax class, click on Add New button.
- Once you click on add new button, you should have to enter name of your product tax class in the Class Name. Click on save class button from top right corner.
