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Avalara Integrated Sales Tax

Akhil S
  • Updated

This article walks through setting up Avalara, which is use an integrated tax option to calculate taxes during the checkout process.

Note: In order to calculate real time sales tax rates, you will first need to set up an account with Avalara.

Article Sections

Activate the Tax Integration Add-On

  1. Access the Features page.
  2. Click into the Add-Ons section.
  3. Toggle the Tax Integrations feature on. Click Approve if you agree to an additional monthly support fee. Click Close or Set Up Now to continue.

Enable Avalara Sales Tax Integration

  1. Access the Taxes page.
  2. Click into the Setup section.
  3. Toggle the Enable Tax option on.
  4. From the Tax Method drop down, select Avalara.
  5. Save changes.

Configure the Avalara Setup

  1. Click into the Avalara tab.
  2. Enter the required (*) and relevant fields as follows. If you need assistance with these values, reach out to Avalara’s support team.
  • Account ID (*) - This is a number used to authenticate the API call.
  • License Key (*) -You can follow these steps to obtain your license key.
  • Default Tax Code (*) - The Default Tax Code is entered by our system but can be changed if needed.
  • Shipping Tax Code (*) - The Shipping Tax Code is entered by our system but can be changed if needed. 
  • Company Code  (*) - The Company Code is a value that you can find within your Avatax account. We recommend reaching out to Avalara's support team if you cannot locate this.
  • Fallback Tax Percentage (optional, but if Avalara fails and this is empty, tax will not calculate for that order) -Enter a fallback tax rate that will be charged on the order in the event that Avalara is unable to pull in taxes for an order.
  • Tax Origin Address  (*) - This is where the sale originates from or where the point of sales occurs.
  • Stop order on tax calculation failure -  With this setting enabled, the shopper will not be able to continue the checkout process if the tax calculation fails.
  • Document recording  - Send tax information to Avalara for collection
  • Document Code Prefix - This is turned ON automatically on stores created on or after 04/21/2021 and will default to your store's ID. You can change this if needed. This helps prevent transaction collisions occurring when they are sent to your Avatax account.

3. Save changes.

4. Test Connection - Once all information has been entered and saved, use the Test Connection button to verify the setup is correct. If correct a "Successfully connected" message will appear.

Tax Codes at the Product Level

Product Tax Codes can be configured at the product level, which will override the default code set up in the tax configuration.

  1. Access the Products page and click the pencil (edit) icon for the product to be set up.
  2. Click into the Setup section.
  3. Click the Product Info tab.
  4. Product Tax Code - Enter the tax code that is specific to this product. This will override the default tax code entered in the tax configuration.
  5. Click to Save.

User/Group Tax Exemption Reason

If you are using the Avalara sales tax integration on your store, you can apply Tax Exemption Reasons at the group OR user level. This makes it so, if a Tax Exemption Reason is setup, then Avalara will calculate taxes based on that value.

Group Tax Exemption Reason

group_tax_exemption.png

When you configure a Group Tax Exemption Reason, this means that any user assigned to that group will have that Tax Exemption Reason used to calculate sales tax. To add this:

  1. Login to the store's admin area and click to expand Users & Groups, and click into Groups. 
  2. Next, click edit (ico_image.png - not shown in screen-shot) to go into the group's settings.
  3. Here, you will see a drop-down list for Tax Exemption Reason (Avalara) and click into this list to select the applicable reason.
  4. Click Save when finished to apply your changes.

User Tax Exemption Reason

user_tax_exemption.png

When you configure a User Tax Exemption Reason, this means that any order placed by this user will use that Tax Exemption Reason to calculate sales tax. If a user is under a group that ALSO has a Tax Exemption Reason configure, the user level settings override that. To add this:

  1. Login to the store's admin area and click to expand Users & Groups, and click into Users.
  2. Locate the account you need to modify and click edit (ico_image.png - not shown in screen-shot) to go into that user's settings.
  3. Scroll down, and here, you will see a drop-down list for Tax Exemption Reason (Avalara) and click into this list to select the applicable reason. By default, the option Use group setting will be selected.
  4. Click Save when finished to apply your changes.

Notes

  • Setup Charges are not included in the detail sent to Avalara for them to calculate Sales Tax.

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