Tax Settings

Overview

The Tax Settings screen identifies which tax calculation option is in use for your org (organization). Available options include one of the following:

Accounting Seed Native Tax - This is the built-in functionality of Accounting Seed (AS) that is used to calculate tax on Billings, Payables, and Opportunities, as well as support tax calculation for VAT (Value-added tax) and GST (Goods and Services tax). This tool is free of charge as it is included in your subscription. For more information, refer to the Set up Accounting Seed (AS) Native Tax article.

Avalara Sales Tax - Avalara’s AvaTax integration calculates sales tax on Billings and estimates sales tax on Opportunities.

Avalara VAT Reporting - A Value-added tax (VAT) is a tax that is placed on a product or service whenever value is added at each state of the supply chain. Avalara has a VAT Reporting system that is a VAT tax return filing solution.

Edit the Tax Settings

Navigate to Accounting Home and click the Setup tab. Then, under the Utilities menu, click Tax Settings. The Tax Settings screen displays.
Click the Pencil icon to edit the information.
From the Available Tax Calculation Options, select the appropriate tax radio button as one of the following:
1. Accounting Seed Native Tax
2. Avalara Sales Tax - the Sales Tax Calculation Settings section for Avalara Displays.
  1. Sales Tax Calculation Mode - select one of the following:
    - 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 below and the Destination address is set to the Shipping Address on the Billing.
      Note: If the Sales Tax Calculation Mode is Shipment, then a complete and valid shipping address must be entered in order for the Avalara sales tax calculation to function as expected.
    - 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 below.
    - 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.
      Note: If the Sales Tax Calculation Mode is Point of Destination, then a complete and valid shipping address must be entered in order for the Avalara sales tax calculation to function as expected.
  2. Avalara Credentials can be located from your Avalara AvaTax Settings in avalara.com. Locate and add the following in this Sales Tax Settings section of the screen:
    - Avalara Account ID
    - Avalara License Key
    - Company Code
      Note: The Avalara Account ID and the Company Code can be located within Avalara from the Settings drop-down menu and selecting All AvaTax Settings.
      
      Also, in Avalara on the Avalara AvaTax screen, scroll down the page to License and API Keys. Click the link to generate the License Key. The Account Administrator permission level is required in order to view and display the License and API Keys information.
  3. Avalara Endpoint, select the Sandbox or Production radio button. Select Sandbox to test this feature until you are ready to deploy to your Production environment.
  4. Avalara Configuration includes the Avalara Sales Tax GL Account number textbox. Click the Lookup icon to search for and select an Avalara Sales Tax GL Account. Typically, this is a liability account used to track the liability that you owe for taxes. If one has not been created, you will need to create a Sales Tax GL Account. The Avalara Tax Product textbox is also included with the Avalara Configuration. Click the Lookup icon to search for and select the Tax Product GL Account for Avalara.
    Note: This generic product record needs to be set up as an active product and included in your price book(s) before it can be searched for and selected from the Avalara Tax Product field. The Product Name that you assign to this generic product will display on the Billing invoice.
  5. Avalara Origin Address field is used to enter your company’s address as it displays in Avalara.
  6. Avalara Help Links include the following:
  7. Test Connection button is available to test the connection after entering settings. Click Test Connection to test the settings and make certain that you have a connection with Avalara.
  8. Validate Address button is used to validate the entered Avalara Origin Address.
    Note: Avalara requires valid address information to perform the tax calculations.
3. Avalara VAT Reporting- VAT Reporting Settings include the following:
  Note: Avalara VAT Reporting option will only display in this screen if you have this extension package installed.
  1. Avalara VAT Credentials should be located and added for the following fields:
    - Avalara VAT Reporting Account ID
    - Avalara VAT Reporting License Key
      Note: If you have a question about your VAT Reporting Account ID or VAT Reporting License Key, please contact your Avalara representative.
  2. Avalara VAT Endpoint, select the Sandbox or Production radio button. Select Sandbox to test this feature until you are ready to deploy to your Production environment.
  3. Avalara VAT Ledger Configuration should be completed for each Ledger Name:
    - Default Bank Account
    - Default Billing Format
    - Billing Activity Statement Format
    - Billing Outstanding Statement Format
    - Company Code
    - VAT Country
  4. Avalara VAT Reporting Helpful Links include the following:
Click Save.