Apply tax codes to manage item taxability. Assigning product and product categories to items gives you important jurisdictional subtlety in taxability. Avalara has predefined Avalara tax code with a taxability profile in place for all US states. Or, create your own custom tax codes andin AvaTax. Keep in mind that Avalara updates Avalara tax code when taxability rules change, but custom tax codes and rules are maintained by you; they're not updated when tax laws change. Also, make sure you enable nexus in the jurisdictions where you're required to register and collect tax so AvaTax calculates the full tax amount.
Map items to tax codes
Map items to UPCs
For an item, you can choose to send the model number or the UPC (Universal Product Code) from your accounting software to AvaTax. If the UPC is not available, the model number is set as the default and sent to AvaTax.
To customize taxability for specific products,need to be mapped to UPCs, and model numbers. Items that aren't mapped to tax codes are treated as Tangible Personal Property (TPP), and are fully taxed during calculation.
You're almost finished setting up your integration. Now send a test transaction from your system to AvaTax to make sure you're calculating sales tax accurately.