diff --git a/includes/API/Orders_Controller.php b/includes/API/Orders_Controller.php
index c77cc4b9..b641d058 100644
--- a/includes/API/Orders_Controller.php
+++ b/includes/API/Orders_Controller.php
@@ -536,6 +536,7 @@ public function wcpos_tax_based_on( $value, $option ) {
 
 		// try to get POS tax settings from order meta
 		$raw_data = $this->wcpos_request->get_json_params();
+
 		if ( isset( $raw_data['meta_data'] ) ) {
 			foreach ( $raw_data['meta_data'] as $meta ) {
 				if ( '_woocommerce_pos_tax_based_on' == $meta['key'] ) {
diff --git a/tests/includes/API/Test_Order_Taxes.php b/tests/includes/API/Test_Order_Taxes.php
new file mode 100644
index 00000000..5c157e07
--- /dev/null
+++ b/tests/includes/API/Test_Order_Taxes.php
@@ -0,0 +1,208 @@
+<?php
+
+namespace WCPOS\WooCommercePOS\Tests\API;
+
+use Automattic\WooCommerce\RestApi\UnitTests\Helpers\CustomerHelper;
+use Automattic\WooCommerce\RestApi\UnitTests\Helpers\OrderHelper;
+use Automattic\WooCommerce\RestApi\UnitTests\Helpers\ProductHelper;
+use WC_Order_Item_Fee;
+use WCPOS\WooCommercePOS\API\Orders_Controller;
+use WCPOS\WooCommercePOS\Tests\Helpers\TaxHelper;
+
+/**
+ * @internal
+ *
+ * @coversNothing
+ */
+class Test_Order_Taxes extends WCPOS_REST_Unit_Test_Case {
+	public function setup(): void {
+		parent::setUp();
+		$this->endpoint = new Orders_Controller();
+		update_option( 'woocommerce_calc_taxes', 'yes' );
+
+		// Set default address
+		// update_option( 'woocommerce_default_country', 'GB' );
+
+		/**
+		 * Init Taxes
+		 *
+		 * use WooCommerce Tax Dummy Data
+		 */
+		TaxHelper::create_tax_rate(
+			array(
+				'country' => 'GB',
+				'rate'    => '20.000',
+				'name'    => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+			)
+		);
+		TaxHelper::create_tax_rate(
+			array(
+				'country' => 'GB',
+				'rate'    => '5.000',
+				'name'    => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => 'reduced-rate',
+			)
+		);
+		TaxHelper::create_tax_rate(
+			array(
+				'country' => 'GB',
+				'rate'    => '0.000',
+				'name'    => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => 'zero-rate',
+			)
+		);
+		TaxHelper::create_tax_rate(
+			array(
+				'country' => 'US',
+				'rate'    => '10.000',
+				'name'    => 'US',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+			)
+		);
+		TaxHelper::create_tax_rate(
+			array(
+				'country' => 'US',
+				'state'   => 'AL',
+				'postcode' => '12345; 123456',
+				'rate'    => '2.000',
+				'name'    => 'US AL',
+				'priority' => 2,
+				'compound' => true,
+				'shipping' => true,
+			)
+		);
+	}
+
+	public function tearDown(): void {
+		parent::tearDown();
+	}
+
+	/**
+	 * Create a new order.
+	 */
+	public function test_create_order_with_tax(): void {
+		$request = $this->wp_rest_post_request( '/wcpos/v1/orders' );
+		$request->set_body_params(
+			array(
+				'payment_method' => 'pos_cash',
+				'line_items'     => array(
+					array(
+						'product_id' => 1,
+						'quantity'   => 1,
+						'price'      => 10,
+						'total'      => '10.00',
+					),
+				),
+				'billing' => array(
+					'email'      => '',
+					'first_name' => '',
+					'last_name'  => '',
+					'address_1'  => '',
+					'address_2'  => '',
+					'city'       => '',
+					'state'      => '',
+					'postcode'   => '',
+					'country'    => '',
+					'phone'      => '',
+				),
+			)
+		);
+
+		$response = $this->server->dispatch( $request );
+		$data     = $response->get_data();
+		$this->assertEquals( 201, $response->get_status() );
+
+		// line item taxes
+		$this->assertEquals( 1, \count( $data['line_items'] ) );
+		$this->assertEquals( 1, \count( $data['line_items'][0]['taxes'] ) );
+		$this->assertEquals( '1', $data['line_items'][0]['taxes'][0]['total'] );
+
+		// order taxes
+		$this->assertEquals( 1, \count( $data['tax_lines'] ) );
+		$this->assertEquals( '1.00', $data['tax_lines'][0]['tax_total'] );
+		$this->assertEquals( 'US', $data['tax_lines'][0]['label'] );
+		$this->assertEquals( '10', $data['tax_lines'][0]['rate_percent'] );
+	}
+
+	/**
+	 * Create a new order with customer billing address as tax location.
+	 */
+	public function test_create_order_with_customer_billing_address_as_tax_location(): void {
+		$request = $this->wp_rest_post_request( '/wcpos/v1/orders' );
+		// Prepare your data as an array and then JSON-encode it
+		$data = array(
+			'payment_method' => 'pos_cash',
+			'line_items'     => array(
+				array(
+					'product_id' => 1,
+					'quantity'   => 1,
+					'price'      => 10,
+					'total'      => '10.00',
+				),
+			),
+			'billing' => array(
+				'email'      => '',
+				'first_name' => '',
+				'last_name'  => '',
+				'address_1'  => '',
+				'address_2'  => '',
+				'city'       => '',
+				'state'      => '',
+				'postcode'   => '',
+				'country'    => 'GB',
+				'phone'      => '',
+			),
+			'meta_data' => array(
+				array(
+					'key'   => '_woocommerce_pos_tax_based_on',
+					'value' => 'billing',
+				),
+			),
+		);
+
+		// Set the body to a JSON string
+		$request->set_header( 'Content-Type', 'application/json' );
+		$request->set_body( wp_json_encode( $data ) );
+
+		$response = $this->server->dispatch( $request );
+		$data     = $response->get_data();
+		$this->assertEquals( 201, $response->get_status() );
+
+		// check meta data
+		$count      = 0;
+		$tax_based_on = '';
+
+		// Look for the _woocommerce_pos_uuid key in meta_data
+		foreach ( $data['meta_data'] as $meta ) {
+			if ( '_woocommerce_pos_tax_based_on' === $meta['key'] ) {
+				$count++;
+				$tax_based_on = $meta['value'];
+			}
+		}
+
+		$this->assertEquals( 1, $count, 'There should only be one _woocommerce_pos_tax_based_on.' );
+		$this->assertEquals( 'billing', $tax_based_on, 'The value of _woocommerce_pos_tax_based_on should be billing.' );
+
+		// line item taxes
+		$this->assertEquals( 1, \count( $data['line_items'] ) );
+		$this->assertEquals( 1, \count( $data['line_items'][0]['taxes'] ) );
+		$this->assertEquals( '2', $data['line_items'][0]['taxes'][0]['total'] );
+
+		// order taxes
+		$this->assertEquals( 1, \count( $data['tax_lines'] ) );
+		$this->assertEquals( '2.00', $data['tax_lines'][0]['tax_total'] );
+		$this->assertEquals( 'VAT', $data['tax_lines'][0]['label'] );
+		$this->assertEquals( '20', $data['tax_lines'][0]['rate_percent'] );
+	}
+}
diff --git a/tests/includes/API/Test_Products_Controller.php b/tests/includes/API/Test_Products_Controller.php
index 6e9959c1..f4840d5b 100644
--- a/tests/includes/API/Test_Products_Controller.php
+++ b/tests/includes/API/Test_Products_Controller.php
@@ -464,11 +464,15 @@ public function test_product_update_decimal_quantities(): void {
 		$product->save();
 
 		$request  = $this->wp_rest_patch_request( '/wcpos/v1/products/' . $product->get_id() );
-		$request->set_body_params(
-			array(
-				'stock_quantity' => '3.85',
+		$request->set_header( 'Content-Type', 'application/json' );
+		$request->set_body(
+			wp_json_encode(
+				array(
+					'stock_quantity' => '3.85',
+				)
 			)
 		);
+
 		$response       = $this->server->dispatch( $request );
 		$data           = $response->get_data();
 
diff --git a/tests/includes/Helpers/TaxHelper.php b/tests/includes/Helpers/TaxHelper.php
index 7c6c2734..492b1037 100644
--- a/tests/includes/Helpers/TaxHelper.php
+++ b/tests/includes/Helpers/TaxHelper.php
@@ -13,27 +13,27 @@ class TaxHelper {
 	 *
 	 * @return int|WP_Error The newly created tax rate ID or a WP_Error object.
 	 */
-	public static function create_tax_rate($data): int {
+	public static function create_tax_rate( $data ): int {
 		$tax_id = WC_Tax::_insert_tax_rate(
 			array(
-				'tax_rate_country'      => $data['country'],
-				'tax_rate_state'        => $data['state'],
+				'tax_rate_country'      => $data['country'] ?? '',
+				'tax_rate_state'        => $data['state'] ?? '',
 				'tax_rate'              => $data['rate'],
 				'tax_rate_name'         => $data['name'],
-				'tax_rate_priority'     => $data['priority'],
+				'tax_rate_priority'     => $data['priority'] ?? 1,
 				'tax_rate_compound'     => $data['compound'] ? 1 : 0,
 				'tax_rate_shipping'     => $data['shipping'] ? 1 : 0,
-				'tax_rate_order'        => $data['order'] ?? 0,
+				'tax_rate_order'        => $data['order'] ?? 1,
 				'tax_rate_class'        => $data['class'] ?? '',
 			)
 		);
 
-		if (isset($data['postcode'])) {
-			WC_Tax::_update_tax_rate_postcodes($tax_id, $data['postcode']);
+		if ( isset( $data['postcode'] ) ) {
+			WC_Tax::_update_tax_rate_postcodes( $tax_id, $data['postcode'] );
 		}
 
-		if (isset($data['city'])) {
-			WC_Tax::_update_tax_rate_cities($tax_id, $data['city']);
+		if ( isset( $data['city'] ) ) {
+			WC_Tax::_update_tax_rate_cities( $tax_id, $data['city'] );
 		}
 
 		return $tax_id;
@@ -48,67 +48,77 @@ public static function create_tax_rate($data): int {
 	 *
 	 * @return bool|WP_Error True on success, WP_Error on failure.
 	 */
-	public static function delete_tax_rate(int $tax_rate_id) {
-		return WC_Tax::_delete_tax_rate($tax_rate_id);
+	public static function delete_tax_rate( int $tax_rate_id ) {
+		return WC_Tax::_delete_tax_rate( $tax_rate_id );
 	}
 
 	/**
 	 * Match the sample data given by WooCommerce.
 	 */
 	public static function create_sample_tax_rates_GB(): array {
-		$id1 = self::create_tax_rate(array(
-			'country'  => 'GB',
-			'rate'     => '20.0000',
-			'name'     => 'VAT',
-			'priority' => 1,
-			'compound' => true,
-			'shipping' => true,
-			'class'    => '',
-		));
-		$id2 = self::create_tax_rate(array(
-			'country'  => 'GB',
-			'rate'     => '5.0000',
-			'name'     => 'VAT',
-			'priority' => 1,
-			'compound' => true,
-			'shipping' => true,
-			'class'    => 'reduced-rate',
-		));
-		$id3 = self::create_tax_rate(array(
-			'country'  => 'GB',
-			'rate'     => '0.0000',
-			'name'     => 'VAT',
-			'priority' => 1,
-			'compound' => true,
-			'shipping' => true,
-			'class'    => 'zero-rate',
-		));
+		$id1 = self::create_tax_rate(
+			array(
+				'country'  => 'GB',
+				'rate'     => '20.0000',
+				'name'     => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => '',
+			)
+		);
+		$id2 = self::create_tax_rate(
+			array(
+				'country'  => 'GB',
+				'rate'     => '5.0000',
+				'name'     => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => 'reduced-rate',
+			)
+		);
+		$id3 = self::create_tax_rate(
+			array(
+				'country'  => 'GB',
+				'rate'     => '0.0000',
+				'name'     => 'VAT',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => 'zero-rate',
+			)
+		);
 
-		return array($id1, $id2, $id3);
+		return array( $id1, $id2, $id3 );
 	}
 
 	public static function create_sample_tax_rates_US(): array {
-		$id1 = self::create_tax_rate(array(
-			'country'  => 'US',
-			'rate'     => '10.0000',
-			'name'     => 'US',
-			'priority' => 1,
-			'compound' => true,
-			'shipping' => true,
-			'class'    => '',
-		));
-		$id2 = self::create_tax_rate(array(
-			'country'  => 'US',
-			'state'    => 'AL',
-			'postcode' => '12345; 123456',
-			'rate'     => '2.0000',
-			'name'     => 'US AL',
-			'priority' => 2,
-			'compound' => true,
-			'shipping' => true,
-			'class'    => '',
-		));
+		$id1 = self::create_tax_rate(
+			array(
+				'country'  => 'US',
+				'rate'     => '10.0000',
+				'name'     => 'US',
+				'priority' => 1,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => '',
+			)
+		);
+		$id2 = self::create_tax_rate(
+			array(
+				'country'  => 'US',
+				'state'    => 'AL',
+				'postcode' => '12345; 123456',
+				'rate'     => '2.0000',
+				'name'     => 'US AL',
+				'priority' => 2,
+				'compound' => true,
+				'shipping' => true,
+				'class'    => '',
+			)
+		);
 
-		return array($id1, $id2);
+		return array( $id1, $id2 );
 	}
 }