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I'm working on a custom payment gateway, and the concept of tax adjustments are giving me some headache.

How is this adjustment system, especially regarding tax, supposed to be used? Would it be normal, or at least make sense, for some stores to use both included and excluded tax on certain items?

Lets use this example:

The Last Knee-High    $60.00
Exclude               $3.00 (5%)
Included              $1.75 (3% inc)
Total USD:            $63.00

The payment provider I'm integrating with require the tax amount and tax rate to be sent with the order to the API.

The tax amount is marked as VAT in the overview, would it then be correct to send:

  • $3.00 5% VAT ?
  • $1.75 3% VAT ?
  • $4.75 X% VAT ?

Or is it just not likely that any company would need both included and excluded taxing in the store? For European stores I looks like its custom to display prices inc tax/vat, while US it looks more normal to include the tax/vat in the cart, not while browsing. So I can't just say that VAT = excluded tax or included tax.

Hopefully I've explained my question well enough for someone to shed some light.

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