# Use Magento Out-Of-Box tax

## OOB tax setup for testing:

Magento 2 has useful Out-of-box (OOB) product tax and shipping tax (ship tax) features. This guide shows how to set them up.  
Remember to disable third-party tax modules, such as Avatax

**Step 1**: Stores > Tax Zones and Rates : setup a tax zone e.g. CA or WA, wildcard / \* for zip, tax rate e.g. 8.25%

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/image.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/image.png)

Notice naming conventions, product tax is `IL\_625`, ship tax is `ship\_IL\_6265`

**Step 2**: Add two tax rules, one for Product Tax and one for Ship Tax:

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/st1image.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/st1image.png)

**Step 2a**: Rule one: Product Taxes:

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/ZlBimage.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/ZlBimage.png)

**Step 2b**: Rule two: Shipping taxes

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/TwEimage.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/TwEimage.png)

  
Notice, in Shipping\_Taxes rule, in the ProductTaxClass, add a new class and name it `**shipping\_tax**`

Step 3: Configure tax classes and rules  
3a: Configure Ship Tax class as the `**shipping\_tax**` class we created above

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/i7himage.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/i7himage.png)

  
3b: Configure Shipping Tax Price Calculation as `Including Tax`:

[![image.png](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/scaled-1680-/Tukimage.png)](https://frdocs.socalappsolutions.com/uploads/images/gallery/2025-07/Tukimage.png)

  
That's it.