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Add or Import Custom Tax Rules

This article applies to:Avalara AvaTax

If you can't find your product listed in our Avalara tax codes, create a custom tax rule. Before a tax ruleHoverTT.png can be added, jurisdictions, tax codes, and items must be added. You can add one at a time or you can choose to import many tax rules at once. Decide which type of tax rule to add first:

  • Taxability (default option and frequently used type): Identifies a tax code as non-taxable for a particular taxing jurisdiction
  • Exempt Entity: Determines how and where an entity use code associated with a particular customer is considered exempt from tax. An entity use tax rule can be applied only to an entity use code or a combination of entity use code and tax code.
  • Base override: Identifies the percentage of the base (sale) amount that is considered taxable
  • Rate override: Overrides a standard tax rate returned by the AvaTax service and instead uses a specified tax rate for a particular taxing jurisdiction

Adding a tax rule is a two-step process. First, select the jurisdiction(s) to which the tax rule applies. Second, add the details for the particular tax rule.

Add a taxability tax rule

Add a taxability tax rule to identify a tax code as non-taxable for a particular taxing jurisdiction.

  1. On the Organization tab, click the Custom Tax Rules button tax_rules.giffor a company.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRules.png
  2. On the Tax Rules screen, click New.
    AvaTaxCalc-Organization-TaxProfile-ClickNewTaxRule.png
  3. On the New: Tax Rule screen, Step 1: Jurisdiction Selection, complete the required fields:
    • Country
    • Level
    • Region
    • County
    • City
    • Special Tax Jurisdiction
    Note:

    The required fields change for each level selected.

    AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep1.png

  4. Click Next.
  5. On the New: Tax Rule screen, Step 2: Details, complete the fields common to all Tax Rule Types:
    Name: The name of the tax rule for display purposes on the Tax Rule List
    Tax Type: The type of tax to which the tax rule applies.
    1. For United States jurisdictions, select from:
      • Sales and Sellers Use – the tax rule applies to both sales and sellers use tax
      • Sales – the tax rule only applies to sales tax
      • Sellers Use – the tax rule only applies to sellers use tax
    2. For Canada or other country jurisdictions, select from:
      • Input and Output Tax – the tax rule applies to both input and output tax
      • Input Tax – the tax rule only applies to input tax
      • Output Tax – the tax rule only applies to output tax
        AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep2CommonFields.png
  6. Select Taxability as the Rule Type.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleTypeTaxability.png
  7. Choose a Taxable option (United States only) or select a Rate Type (non-US countries).
    • Taxable
      • Yes – makes the tax code taxable for the jurisdiction
      • No – makes the tax code nontaxable for the jurisdiction
    • Rate Type
      • Increased Standard - An increased value added tax (VAT) rate is applied to the product

      • Parking - The VAT rate for parking is applied to the product

      • Reduced A - A reduced VAT rate is applied to the product

      • Reduced B - A reduced VAT rate is applied to the product

      • Reduced R - A reduced VAT rate is applied to the product

      • Standard (default) - The standard VAT rate is applied to the product

      • Super Reduced - A reduced VAT rate is applied to the product

      • Zero - A VAT rate of zero is applied to the productAvaTaxCalc-Organization-TaxProfile-ChooseOrSelectTaxableorRateType.png

  8. Click Finish. The tax rule appears on the Tax Rule List. A message indicating "The operation completed successfully" displays above the Tax Rule List.

Add an exempt entity tax rule

Add an exempt entity tax rule to determine how and where an entity use code associated with a particular customer is considered exempt from tax. An entity use tax rule can be applied only to an entity use code or a combination of entity use code and tax code.

  1. On the Organization tab, click the Custom Tax Rules button  for a company.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRules.png
  2. On the Tax Rules screen, click New.

    AvaTaxCalc-Organization-TaxProfile-ClickNewTaxRule.png
  3. On the New: Tax Rule screen, Step 1: Jurisdiction Selection, complete the required fields:
    • Country
    • Level
    • Region
    • County
    • City
    • Special Tax Jurisdiction
      AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep1.png
  4. Click Next.
  5. On the New: Tax Rule screen, Step 2: Details, complete the fields common to all Tax Rule Types:


    Name: The name of the tax rule for display purposes on the Tax Rule List

    Tax Type: The type of tax to which the tax rule applies.

    Tax Code: The tax code that applies to the tax rule. You can browse custom tax codes and AvaTax System tax codes with the tax code picker.

    Start Date: The date the tax rule goes into effect.

    End Date: The date on which the tax rule expires
    AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep2CommonFields.png

    1. For United States jurisdictions, select from:​
      • Sales and Sellers Use ? the tax rule applies to both sales and sellers use tax
      • Sales ? the tax rule only applies to sales tax
      • Sellers Use ? the tax rule only applies to sellers use tax
    2. For Canada or other country jurisdictions, select from:
      • Input and Output Tax ? the tax rule applies to both input and output tax
      • Input Tax ? the tax rule only applies to input tax
      • Output Tax ? the tax rule only applies to output tax
  6. Select Exempt Entity as the Rule Type.

    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleTypeExemptEntity.png
  7. Choose an Exempt option.

    AvaTaxCalc-Organization-TaxProfile-ChooseExemptOption.png
  8. Select or type an Entity Use Code to group like kinds of customers for exemption purposes.
    Note:
    Entity use code values depend on the country selected in Step 1: Jurisdiction Selection.

    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleEntityUseCode.png

  9. Click Finish. The tax rule appears on the Tax Rule List. A message indicating "The operation completed successfully." displays above the Tax Rule List.

Add a base override tax rule

Add a base override tax rule to identify the percentage of the base (sale) amount that is considered taxable.

  1. On the Organization tab, click the Custom Tax Rules button for a company.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRules.png
  2. On the Tax Rules screen, click New.
    AvaTaxCalc-Organization-TaxProfile-ClickNewTaxRule.png
  3. On the New: Tax Rule screen, Step 1: Jurisdiction Selection, complete the required fields:
    • Country
    • Level
    • Region
    • County
    • City
    • Special Tax Jurisdiction
       
      Note:
      The required fields change for each level selected.

      AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep1.png

  4. Click Next.
  5. On the New: Tax Rule screen, Step 2: Details, complete the fields common to all Tax Rule Types:
    Name: The name of the tax rule for display purposes on the Tax Rule List
    Tax Type: The type of tax to which the tax rule applies.
    1. For United States jurisdictions, select from:
      • Sales and Sellers Use -- the tax rule applies to both sales and sellers use tax
      • Sales -- the tax rule only applies to sales tax
      • Sellers Use -- the tax rule only applies to sellers use tax
    2. For Canada or other country jurisdictions, select from:
      • Input and Output Tax -- the tax rule applies to both input and output tax
      • Input Tax -- the tax rule only applies to input tax
      • Output Tax -- the tax rule only applies to output tax

        Tax Code: The tax code that applies to the tax rule. You can browse custom tax codes and AvaTax System tax codes with the tax code picker.
        Start Date: The date the tax rule goes into effect.
        End Date: The date on which the tax rule expires
        AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep2CommonFields.png
  6. Select Base Override as the Rule Type.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleTypeBaseOverride.png
  7. Select or type an Entity Use Code to group like kinds of customers for exemption purposes, if desired.

    Note:

    Entity use code values depend on the country selected in Step 1: Jurisdiction Selection.

    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleEntityUseCode.png

  8. Type a Base Override %.
    AvaTaxCalc-Organization-TaxProfile-TypeTaxRuleBaseOverridePercent.png
  9. Click Finish. The tax rule appears on the Tax Rule List. A message indicating "The operation completed successfully." displays above the Tax Rule List.

Add a rate override tax rule

Add a rate override tax rule to override a standard tax rate returned by the AvaTax service and instead use a specified tax rate for a particular taxing jurisdiction.

  1. On the Organization tab, click the Custom Tax Rules button for a company.

    AvaTaxCalc-Organization-TaxProfile-SelectTaxRules.png
  2. On the Tax Rules screen, click New.
    AvaTaxCalc-Organization-TaxProfile-ClickNewTaxRule.png
  3. On the New: Tax Rule screen, Step 1: Jurisdiction Selection, complete the required fields:
    Note:
    The required fields change for each level selected.
    AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep1.png
    • Country
    • Level
    • Region
    • County
    • City
    • Special Tax Jurisdiction
  4. Click Next.
  5. On the New: Tax Rule screen, Step 2: Details, complete the fields common to all Tax Rule Types:

    Name: The name of the tax rule for display purposes on the Tax Rule List

    Tax Type: The type of tax to which the tax rule applies.
    Tax Code: The tax code that applies to the tax rule. You can browse custom tax codes and AvaTax System tax Codes with the tax code picker (not a required field).

    1. For United States jurisdictions, select from:
      • Sales and Sellers Use -  the tax rule applies to both sales and sellers use tax
      • Sales - the tax rule only applies to sales tax
      • Sellers Use - the tax rule only applies to sellers use tax
    2. For Canada or other country jurisdictions, select from:
      • Input and Output Tax - the tax rule applies to both input and output tax
      • Input Tax - the tax rule only applies to input tax
      • Output Tax - the tax rule only applies to output tax
         

        Start Date: The date the tax rule goes into effect.

        End Date: The date on which the tax rule expires.

        AvaTaxCalc-Organization-TaxProfile-CompleteTaxRuleStep2CommonFields.png
  6. Select Rate Override as the Rule Type.
    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleTypeBaseOverride.png
  7. Select or type an Entity Use Code to group like kinds of customers for exemption purposes, if desired.
    Note:
    Entity use code
    values depend on the country selected in Step 1: Jurisdiction Selection.

    AvaTaxCalc-Organization-TaxProfile-SelectTaxRuleEntityUseCode.png

  8. Type a Rate Override % to override the tax rate returned from AvaTax and apply the desired tax rate.
    AvaTaxCalc-Organization-TaxProfile-TypeTaxRuleRateOverridePercent.png
  9. Click Finish. The tax rule appears on the Tax Rule List. A message indicating "The operation completed successfully." displays above the Tax Rule List.

    Note:

    You may need to adjust transactions processed using rate override tax rules. For tax return purposes, transactions must conform to the established rates for the jurisdictions involved in the transactions.

Import tax rules

The Import Data tool allows you to easily import a large number of predefined custom tax rules. You can learn how to import a file or read the complete listing of juriscodes.

Import tax rules in either an Excel (.xls or .xlsx) file format, or a Comma Separated Value (.csv) file format. The templates in the Tax Rules Toolkit use the correct column headings. The maximum number of lines allowed in one import file is 100,000.

How to format the tax rule import template

The column headings in the import file must use the labels exactly as shown below. The individual data fields must conform to the type (Size) and use restrictions listed.

Column Column Heading Type (Size) Use Description
A TaxRuleId Integer Required Tax rule record number. This is not imported but is used to identify error records.
B ProcessCode Integer Required Determines the processing for this rule.

0 = Delete rule

  • Delete must match on TaxRuleTypeId, Country, State, JurisTypeId, JurisCode, EntityUseCode, TaxCode, TaxTypeId, EffDate, and Threshold

 

1 = Insert/update rule

C TaxRuleTypeId Integer Required

0 = Excise tax

1 = Rate override rule

2 = Base override rule

3 = Entity use rule

4 = Product taxability rule

D TaxRuleSubtypeId Text (1) Optional

Reserved for future use. Column must be left blank.

E Country Text (2) Required Two digit country code:
  • US = United States
  • CA = Canada
  • AU = Australia
  • NZ = New Zealand
  • TW = Taiwan
F Region Text (3) Required ISO 2 or 3 character state or province code (e.g. AL, AK, AZ, etc.)
G JurisTypeId Text (3) Required Jurisdiction type identifier:
  • CNT = Country
  • STA = State/Province (Region)
  • CTY = County
  • CIT = City
  • STJ = Special Tax Jurisdiction
H JurisCode Text (10) Required

Jurisdiction code:

A mandatory field if you want to create a tax rule.

An asterisk (*) indicates that it applies to all the jurisdictions of the type specified by JurisTypeId. This asterisk is only applicable for county, city, and special tax jurisdiction

Example: For a state-level rule, the state JurisCode is required  and applies to all the instances of that level in the state.
For a county-level rule, the county JurisCode is required. 

I JurisName Text (200) Optional Name of the jurisdiction. This is for informational purposes only and is replaced by the standard jurisdiction name when imported.
J IsAllJuris Boolean Optional 0 = The tax rule only applies to the identified jurisdiction (column G). This is the default.

1 = The tax rule extends to all jurisdictions in the tax region.

K TaxCode Text (25) Required for Product Taxability Rules, Optional for other rule types An AvaTax System tax code or custom tax code indicating the category of product, service, or charge.
L EntityUseCode Text (25) Required for Entity Use Rules, Optional for other rule types System or custom entity use code. Use codes for the United States and Canada are different.

A = Federal government (United States)

B = State government (United States)

C = Tribe / Status Indian / Indian Band (both)

D = Foreign diplomat (both)

E = Charitable or benevolent org (both)

F = Religious or educational org (both)

G = Resale (both)

H = Commercial agricultural production (both)

I = Industrial production / manufacturer (both)

J = Direct pay permit (United States)

K = Direct mail (United States)

L = Other (requires Exempt Reason Desc) (both)

N = Local government (United States)

P = Commercial aquaculture (Canada)

Q = Commercial Fishery (Canada)

R = Non-resident (Canada)

MED1 = US MDET with exempt Sales Tax

MED2 = US MDET with taxable Sales Tax

M TaxTypeId Text (1) Required The type of tax this rule applies to.

domestic (US)

B = Both sales and use (default)

E = Excise

S = Sales

U = Use

 

International (VAT)

B = Both input and output (default)

O = Output

I = Input

N RateTypeId Text Optional For a rate override rule (TaxRuleTypeId 1), this determines what rate type is overridden.

For a product taxability rule (TaxRuleTypeId 4) this determines what rate type is applied to a product.

Domestic (US):

F = Food

G = General (default)

L = Linen rental

M = Medical Devices

R = Rental

International (VAT):

A = Reduced Rate A VAT

B = Reduced Rate B VAT

I = Increased Standard VAT

P = Parking VAT

Q = Super Reduced VAT

R = Reduced VAT

S = Standard VAT (default)

Z = Zero Rate VAT

O Value Decimal Required Varies by rule type

Rate override rule = Override rate (.05 = 5%) or 1 indicates to inherit standard rate

Base override rule = Base rate (0.5 = 50%)

Entity use rule = 0 is exempt or 1 is taxable

Product taxability rule = 0 is non-taxable or 1 = taxable

For international product taxability rules, use 1 for zero-rate products to indicate the product is taxable at the zero rate.

P Threshold Decimal Optional Minimum amount at which a rate override or product taxability rule applies. Blank or 0 indicates no threshold.
Q Cap Decimal Optional Maximum amount to which a rate override or product taxability rule applies. Blank or 0 indicates no cap.
R Options Text (100) Optional Optional settings

Document: Indicates the cap applies to entire invoice. Applies to rule types 1 or 4.

TaxAll: Indicates entire amount should be taxed if the taxable amount exceeds the threshold. Applies to rule types 1 or 4.

TaxCap: Indicates the cap is on the maximum tax rather than the maximum amount. Applies to rule types 1 or 4.

TaxDepends: Indicates the taxability of this item depends on the taxability of other physical items. This only applies to product taxability rules (type 4).

RateDepends: Indicates the rate of this item is determined as the highest rate from all "Qualified items", where qualified items are physical items originating in an EU country.

S IsPro Number Optional Indicates whether this rule applies to only AvaTax Pro and SST accounts.

0 = Non-AvaTax Pro (default)

1 = AvaTax Pro and SST accounts only

T EffDate Date (10) Optional Initial effective date for this rule in yyyy-mm-dd or mm/dd/yyyy format. The minimum and default value is 1/1/1900.
U EndDate Date (10) Optional Expiration date for this rule in yyyy-mm-dd or mm/dd/yyyy format. The maximum and default value is 12/31/9999.
V Description Text (255) Optional Description of the tax rule

How to import a file of tax rules

To perform a bulk import of tax rules, follow the steps below.

  1. On the Organization tab, click the Custom Tax Rules button Picture of the Tax Rules button for a company.
  2. On the Tax Rules screen, click Import.
  3. On the New: File Import screen, confirm:
    • Tax Rules is selected for Type
    • The correct Company is selected for Company
  4. Click Browse to select the file to import.
  5. Click Upload.