It seems that the tax rate is set to charge sales tax on every purchase regardless of where the product is shipped to.
What I need is to ** ONLY ** charge sales tax for those customers living in one state.
As a side note, I have set the "Tax Calculation Based On" set to Shipping address, but it still displays a tax in the shopping cart even if they shipping address is not our home state.
Please check you may have made some mistake while creating a rule and which is causing this issue.
Follow the articles to avoide making mistakes:
Let me know if you are still having the issue.
We are having the same problem and it's a big deal. Magento defaults to our Florida state sales tax of 7% and shows this amount in our shopping cart. It only changes to the correct amount after the customer puts in their address.
Magento should not show the sales tax amount in the shopping cart until AFTER the customer puts in their address. Before the addrss is put in, Magento does not have the necessary information to calculate the correct sales tax so should not just display a default.
We feel that this is costing us sales because customer see this tax in their cart before checkout and don't want to pay it so abandon their order.
For your requirement, you will need customize the magnto which will show the tax on cart page when customer is there, without entering the address. You can get the address of customer from database and display tax according to that.