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Calculate Tax on a Billing with Avalara's AvaTax

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Overview 

Avalara’s AvaTax integrates to the Accounting Seed Billing object. It allows you to validate shipping and billing addresses, as well as perform an automatic sales tax calculation inside of Accounting Seed.

Note: Currently in Accounting Seed, the United States and Canada are the only valid supported countries for tax calculation on Billings and Opportunities with Avalara AvaTax. If you are not in the US or Canada, Accounting Seed Native Tax can be used for tax calculation.

Warning Messages with AvaTax

Since cross-border tax rules and regulations change over time, warning messages have been added to remind you that if you have Nexus in a country that you are shipping to, where tax should be calculated in that country, the currency should be updated for that country. Therefore, when using AvaTax to calculate tax in either the US or Canada, the system will check the Billing Currency against the Destination Address, and display the following warning messages if the: 

  • Billing Currency is USD and the Destination Address is in Canada - “When calculating tax using AvaTax, if the Destination Address is in Canada and you have Nexus for this address, you should update the currency to CAD.“
  • Billing Currency is CAD and the Destination Address is in the US - “When calculating tax using AvaTax, if the Destination Address is in the US and you have Nexus for this address, you should update the currency to USD."

API Callout to communicate with AvaTax

Accounting Seed uses an API (Application Programming Interface) callout to communicate with AvaTax and perform a sales tax calculation or recalculation each time one of the following buttons is clicked:

  • Calc Tax 
  • Create Billing (available from an Opportunity)
  • Post (this “commits” the transactions into AvaTax)
    • Committed transactions are viewed as finalized or posted transactions.
    • If you unpost a Billing, an API callout is made to AvaTax to uncommit the transactions (unless the transactions are a part of a filed tax return in AvaTax).

      In AvaTax, transactions included on a filed tax return are set to the “Locked” status and cannot be modified. To change a value on the related Billing in Accounting Seed, unpost the record. Since the transactions for the Billing are locked in AvaTax, no API callout is made. You can make changes to the Billing on certain fields (a message displays for fields that cannot be modified). Once the changes are completed, the Billing must be re-posted. Additionally, when the Billing is re-posted, because of the “Locked” status, no API callout will be made to AvaTax.

      Note: Fields that cannot be modified include the following: 

      Billing Header 
      -- Accounting Period
      -- Ledger
      -- Total
      -- Customer
      -- Closed Accounting Period
      -- Currency Conversion Rate
      -- Billing Address
      -- Shipping Address
      -- Origin Address Override
      -- Destination Address Override

      Billing Line
      -- Product
      -- Quantity
      -- Unit Price
      -- Tax Amount

  • Save & Post (available from Mass Add/Edit Rows on a Billing and this commits the transactions into AvaTax). 

Note: An API callout is not performed when the Save & Refresh or Save & Complete button is clicked. 

The Billing record should be set up to include the Calc Tax and the Validate Address buttons. If you have questions about adding these buttons to the Billing page layout, refer to the Edit Page Layouts Manually article. 

Do you want to:

Calculate Tax on a Billing with Avalara's AvaTax

  1. Navigate to Accounting Home and click the Create Entries tab. Then, under the Revenues menu, click Billings.
  2. Select a list view (other than the Recently Viewed list view).
  3. Select a desired Billing. 
  4. (Optional) Click Validate Address.
    Note: If you have recently moved to a new address or the customer has recently updated their address, click the Validate Address button before calculating taxes. This will allow you to confirm the address is entered correctly and will work with AvaTax. 
  5. Click Calc Tax on the Billing's menu bar. The Billing Sales Tax page displays with the calculated summary tax for the Billing.
    Note: If you have the Large Data Optimizer (LDO) feature enabled, refer to the line limit information that relates to clicking the Calc Tax button in the Large Data Optimizer article.
  6. Click Calc Tax again. The API callout is automatically made to Avalara’s AvaTax to calculate the tax amount and then, the summary tax line is added as an additional Billing Line.

    With Header Level Posting (HLP) enabled, the Tax Amount displays as a part of the Billing Line.

    AvaTax_022.png

    With Line Level Posting (LLP) enabled, a separate Billing Line is added for the Tax Amount.

    Avalara_20.png

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Override the Default Address for Tax Calculation on a Billing

You can override the default address on a single Billing based upon the Sales Tax Calculation Mode that is currently selected in the Tax Settings screen. Avalara Sales Tax includes the following Sales Tax Calculation Modes:

  • Shipment - this mode uses AvaTax to determine the proper sourcing of tax for all of your sales transactions. When Shipment is selected, both the Origin and Destination addresses are sent into Avalara. Avalara will then determine the proper amount of tax to apply based upon both the Origin and Destination addresses. The Origin address is set to the Avalara Origin Address defined in the Tax Settings screen and the Destination address is set to the Shipping Address on the Billing.
  • Point of Sales - this mode forces the tax calculation to be based off of the Origin address for all of your sales transactions. Point of Sale is typically used in a retail business where both the Origin and Destination are always the same. In other words, sales are physical in-person transactions at a retail point of sale location. Using this mode, both the Origin and Destination addresses are set to the Avalara Origin Address defined in the Tax Settings screen.
  • Point of Destination - this mode forces the tax calculation to be based upon the Destination address for all of your sales transactions. In other words, this is where the buyer takes possession of the item sold. For example, your Sales team travels to customer locations and they deliver products on-site, and you need to force the tax on all of your sales transactions to trigger on the Destination address, even in mixed-sourcing or origin based states. Using this mode, both the Origin and Destination addresses are set to the Shipping Address on the Billing.

To override the existing Sales Tax Calculation Mode on a Billing, you can select or add a different address that will be sent to Avalara for the tax calculation process. If Shipment is your current Sales Tax Calculation Mode, and you want to override the address, both the Destination Address Override field and the Origin Address Override field on the Billing must be entered. If Point of Sale is your current Sales Tax Calculation Mode, and you want to override the address, the new address must be entered in the Origin Address Override field on the Billing. If Point of Destination is your current Sales Tax Calculation Mode, and you want to override the address, the new address must be entered in the Destination Address Override field on the Billing. 

  1. Navigate to Accounting Home and click the Create Entries tab. Then, under the Revenues menu, click Billings.
  2. Select a list view (other than the Recently Viewed list view).
  3. Select a desired Billing. 
    Note: The Billing cannot be in a "Posted" status. 
  4. Click Edit to add/enter the override address information.
  5. From the Address Information section, click the Lookup icon in the Destination Address Override and/or Origin Address Override field.
    Note: In the sample screen below, both the Destination Address Override and the Origin Address Override fields display on this Billing because the Sales Tax Calculation Mode in the Tax Settings screen is Shipment. Therefore, both the Destination Address Override and Origin Address Override fields will need to include an override address information. 

    AvaTax_01.png

  6. Search for and select an existing Sales Tax Address. Otherwise, add a new address and click Save.

    AvaTax_02.png

    The sample screen includes the override address information for both fields.

    AvaTax_03.png
  7. Click Save.
  8. At this point you can click Calc Tax (if Line Level Posting), as normal.
    Note: Avalara will calculate taxes based upon the address override information. In the sample screen below the original tax calculation was $133.13.

    AvaTax_04.png
    Note: Click here to view the above image in full screen. 

    With the address override information added, the sales tax was recalculated by Avalara. The new sales tax amount is $142.50.

    Note: If you have the Large Data Optimizer feature parameter enabled, refer to the line limit information that relates to clicking the Calc Tax button in the Large Data Optimizer article.

    AvaTax_05.png
    Note: Click here to view the above image in full screen. 

Override the Default Address for Tax Calculation on a Billing Line

You can override the default address on a Billing Line to include an address that is different from the information currently entered on the Billing header in the Origin Address Override/Destination Address Override fields and/or the default address entered in the Tax Settings screen.

On a Billing Line, if the Line Origin Address Override field or the Line Destination Address Override field is populated, the system will send the address in either of these fields to Avalara for tax calculation of that line. On a Billing Line, if either of the override address fields are blank, the system will use the respective override field on the Billing header for tax calculation of the line. If the override fields on the Billing header are blank, the system will use the default address from the Tax Settings screen

Important: When you run the AvaTax Exception Report, Billings that included an override address on a Billing Line will be flagged on this report. Similarly, these Billings will also be flagged in AvaTax. Carefully review these discrepancies to reverify that the address in AvaTax is expected.  

  1. Navigate to Accounting Home and click the Create Entries tab. Then, under the Revenues menu, click Billings.
  2. Select a list view (other than the Recently Viewed list view).
  3. Select the desired Billing. 
    Note: The Billing cannot be in a "Posted" status. 
  4. Scroll to the Billing Lines and select the desired Billing Line.
  5. Click Edit.
  6. Enter a new/different address in one or both of the following fields:
    1. Line Destination Address Override
    2. Line Origin Address Override
  7. Click Save.
  8. From the Billing Line screen, click the Billing hyperlink to refresh the Billing screen.
  9. At this point you can click Calc Tax (with Line Level Posting), as normal.

    Note: Avalara will calculate taxes based upon the Billing Line address override information.

    Note: If you have the Large Data Optimizer feature parameter enabled, refer to the line limit information that relates to clicking the Calc Tax button in the Large Data Optimizer article.

Notes: 

  • Anytime a Billing is posted it refreshes the tax amount from AvaTax. Therefore, if an unposted Billing with a Sales Tax amount that has cash (or credit) applied is then subsequently posted, an API callout to AvaTax may return a changed Tax Amount. This might result in the balance on the Billing being less than zero, which is disallowed by Accounting Seed’s System Business Rules. As a result the Billing will not be allowed to post. In this scenario, you would need to unapply any cash/credit applications, post the Billing, and then re-apply. It may be necessary to re-issue the Billing for any amended taxes. 
  • If Multi-Currency is enabled, when rounding from six decimal places to two, this might cause some totals to be incorrect on Billings by a few cents if tax is calculated on a non-USD Billing (with a USD Ledger). 
  • When using AvaTax and posting from a list view, the allowed batch posting limit is 100 Billings. This limit is only applicable from a list view and does not apply to Billings that are in a Scheduled Post job or are done through an external API callout. 

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Winter '25 Release

Release Notes and Schedule

Avalara's AvaTax is available to calculate sales tax in Canada.

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