Magento: No Tax for Wholesale Customers

We ran into the need today to not charge tax for wholesale customers. The good news is that no code modifications are needed to accomplish this. All the functionality is already built right into Magento. Here’s a step-by-step process on how to charge no tax for wholesale customers only:

1. Go to Sales->Tax->Customer Tax Classes. Add a new class, and call it something like “Wholesale – No Tax” and save it.
2. Go to Sales->Tax->Manage Tax Zones & Rates. Add a new tax rate, call it “Wholesale”, select your country, select “*” for state and zip, and give it a rate of 0. Save the new tax rate.
3. Go to Customers->Customer Groups. Click on the Wholesale group. In the “Tax Class” drop down, select your new “Wholesale” tax class, and save it.

Now – any customers that you assign to the Wholesale customer group will no longer be charged any tax. Having walked through these steps, you can see how much flexibility Magento offers you.