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Set Up Avalara AvaTax Integration

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Overview

Avalara provides through its different product offerings, end-to-end sales tax compliance solutions. Their AvaTax tax engine provides the capability to automatically calculate tax based off of the most current tax rules and legislation. AvaTax is integrated into Accounting Seed. You can use AvaTax to estimate sales tax on Opportunities and calculate sales tax on Billings. After completing the required settings, the Tax Code field on the product will drive the correct tax calculation along with the Avalara Origin Address, Customer Billing Address, and/or Customer Shipping Address. 

Use this article to perform the following processes for setting up the Avalara AvaTax integration:

Best Practice: It is recommended that you establish a cutoff period before switching from one tax methodology to another. In addition, you should not switch tax methodologies in the middle of creating a Billing.

Set up Tax Settings  

For information, refer to the Tax Settings article (Avalara Sales Tax section).

Assign an Avalara Tax Code to a Product in Accounting Seed

AvaTax’s calculations are centered around tax codes assigned to every product record. Users will need to update all existing products with its correct tax code. Note that any products that do not have a tax code are assigned a default tax code, which taxes that product at the tax jurisdiction’s tangible personal property tax rate, which is typically the highest.

  1. Navigate to Accounting Home and click the Setup tab. Then, under the Master menu, click Products.
  2. Select a list view (other than the Recently Viewed list view).
  3. Select a product and then, click Edit.
  4. Update the value for Tax Code.
      1. For a list of tax codes, go to taxcode.avatax.avalara.com.

        Avalara_10.png

      2. Search for and select the appropriate Tax Code.
        Note: If you have any issues with locating the correct Tax Code, contact Avalara Support.
      3. Copy and paste the Tax Code from Avalara into the Tax Code field on the Product record in Accounting Seed.

        Avalara_11.png

      4. Click Save.

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Configure the Account Record for Avalara

If you are using AvaTax, there are several configuration changes that should be made to the Account record page. Use the steps below to complete the changes.
  1. Edit the Account page layout.
    Note: For information about editing a page layout, refer to the Edit Page Layouts Manually article.
  2. Add the following fields to the Account page layout:
    • VAT Business Identification Number - This is an informational field that is used for VAT (Value-added Tax) customers when Avalara Tax calculation is enabled. The value that is entered here will populate the Customer VAT Number field on the Avalara transaction.
    • Exemption Number - If this field is populated, the Account will be considered as tax exempt by AvaTax. AvaTax does not verify the accuracy of the number that is entered in this field. 
    • Entity Use Code - This field should only be populated with a valid Entity Use Code that is available in AvaTax. AvaTax verifies the accuracy of the code that is entered in this field. If the code is not valid, the Account will not be tax exempt.
      Note: When setting up an Account as tax exempt, the Exemption Number and the Entity Use Code fields are mutually exclusive. Therefore, one or the other should be used.
  3. Add the Validate Address button to the Account page layout.
  4. Remove the Taxes related list, which is not applicable to AvaTax.
    Note: The Taxes related list is only applicable to Accounting Seed (AS) Native Sales Tax.
  5. Click Save.
  6. Return and refresh the Account record page. The added fields should display similar to the below sample screen.

    Avalara_12.png

    The Validate Address button should be available from the buttons drop-down list.

    Avalara_13.png

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Notes:  

  • When using AvaTax, any Product that does not map to a specific Tax Code is viewed as a taxable Product rather than a non-taxable Product. Non-taxable Products must be mapped to the correct Tax Code. AvaTax has a default Tax Code (P000000), which will be used to calculate taxes on Products that are not mapped to a specific Tax Code. Products with this default Tax Code will be taxed at the tangible personal property tax rate, which typically is the highest tax rate in a tax jurisdiction. 
  • The Tax Code field is used in the AvaTax integration as part of the API callout to Avalara for calculating the correct Tax Amount. 
  • When using AvaTax as your tax calculation method, the Tax Type and Tax Rate fields are not applicable.

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