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Add a Company

This article applies to:Avalara AvaTax

When you activate your account, you setup your initial companyHoverTT.png. You can always add more companies later. A company in AvaTax is a model of your business from a sales tax and consumer use tax perspective.

After you add a company, edit your company and manage your company.

To add a company:

  1. On the Organization tab, click New.
  2. On the Company Setup screen:
    • Follow the on-screen instructions for each step.
    • Click Next or Back to navigate through the process steps.
    • Save & Exit Setup at any point after creating the company code.
    • Restart the configuration of a company at any time.
  3. At the end of the process, click Finish. The new company appears in the Company list on the Organization tab with a status of In Progress and can be activated.  
  4. Choose the type of company for your company tax profileHoverTT.png
    • Stand-alone company
      • A stand-alone company maintains its own tax profile (jurisdictions, tax codes, tax rules, and items). It also maintains an independent transaction history for reporting and tax returns purposes.
      • Stand-alone companies aren't part of the parent company/child company relationship that defines a multi-company organization.
    • Part of a multi-company organization
      • A company in a multi-company organization is either a parent company or a child company.
      • A multi-company organization allows a child company to inherit a tax profile (jurisdictions, tax codes, tax rules, and items) from a parent company. In addition, the transaction history of a child company can be combined with that of its parent company for reporting and tax returns purposes.
    1. Select or create the parent company. A stand-alone company doesn't have this relationship. To create the parent company/child company relationship in a multi-company organization, first add the parent company. Once a parent company is added and saved, a child company can be added by selecting its parent company.
      • Parent Company: Select  <Create Parent>  to add a parent company. The first company added in a multi-company organization is a parent company.
      • Child Company: Select a company to act as the parent of a new child company. The relationship between a parent company and child company allows a child company to combine its transaction history with its parent company for tax returns and tax return reports and to inherit its tax profile from its parent company.
    2. Define the parent company/child company relationship in a multi-company organization. A stand-alone company doesn't have this relationship. A parent company must be selected to establish this relationship.
      • A separate reporting entityHoverTT.png is a companyHoverTT.png that reports and files its transaction history independent from any parent company or child company with which it’s associated.
        • Choose Yes to allow a child company to maintain its transaction history independent of its parent company.
        • Choose No to allow a child company to combine its transaction history with its parent company for reporting and tax returns purposes.
      • A tax profile is the collection of jurisdictions, tax codes, tax rules, and items that define the taxing policy of a company.
        • Choose Create Tax Profile to allow a child company to create and maintain a tax profile independent of its parent company.
        • Choose Inherit Tax Profile to allow a child company to inherit a tax profile from its parent company.
  5. Identify the company with a company name and a unique company codeHoverTT.pngOnce saved, the company code can't be edited.
    • Company name: Type a name for the company. The company name identifies the company in AvaTax. It should be unique and should match the name in your accounting software.
    • Company code: Type a unique code for each company. The company code must match the code used by your accounting software to identify the company. See all about company codes to learn how various types of accounting software identify a company.
  6. Select both a default country and a base currency.
    • Default Country: The default country is the country AvaTax uses for reporting purposes. It’s also used by AvaTax Global customers.
    • Base Currency: The base currency is the currency AvaTax uses for reporting purposes. It’s also used by AvaTax Global customers.              
  7. The rounding levelHoverTT.png controls how AvaTax rounds the tax amount for a transactionHoverTT.png. AvaTax can round tax amounts at the line level or document level.
    • Line-level rounding
      • Rounds the tax amount to two decimal places for each tax line
      • Discards the rounding difference
      • Adds the tax amounts of each line together to get the total tax amount
      • Occasionally, the sum of each line calculated is a penny less or more than with document rounding
    • Document-level rounding
      • Calculates the tax amount for each line (without rounding), adds those amounts, and then rounds the total to two decimal places
      • Eliminates the occasional rounding inequality experienced with the line-level method by redistributing the rounded amounts
  8. The freight and handling tax dependency level controls which line items your freight and handling taxability depend on. This selection controls how close a match the destination address needs to be to the dependent line to be considered related.
    • Choose Entire Document to make the taxability of freight and handling dependent on all line items in the document.
    • Choose Same State to make the taxability of freight and handling dependent on all line items that have the same destination state as the freight or handling line.
    • Choose Same Tax Region to make the taxability of freight and handling dependent on all line items that have the same destination tax region (same set of taxing jurisdictions) as the freight or handling line.
    • Choose Same Address to make the taxability of freight and handling dependent on all line items that have the same destination address as the freight or handling line.
  9. Click Validate to validate HoverTT.pngthe company address. In all other cases, the company address is optional. Type the address for the companyHoverTT.png. If the Separate Reporting Entity option is set to Yes for a company, complete at least the required fields.
  10. Type the Business Tax Identification Number (TIN) or Business Identification Number (BIN) for the company.
    • The business TIN or taxpayer IDHoverTT.png is a unique, nine-digit identifier assigned to U.S. companies for tax reporting purposes. For a company that's a separate reporting entity, a business TIN or taxpayer ID is required when a company is participating in the Returns program or when a company is participating in the SSTP. In all other cases, the business TIN is optional.
    • The business identification numberHoverTT.png is a unique identifier assigned to a non-U.S. company. This is normally the BIN or value added tax (VAT) identification number. The BIN is optional.
  11. Type the information for the primary contact for the companyHoverTT.png. If the Separate Reporting Entity option is set to Yes for a company, complete at least the required fields.
  12. Enter a locationHoverTT.png for the companyHoverTT.png. You must assign a location code to the company during company creation. If you don't use a location code internally because you have a single location, you can use the company codeHoverTT.png entered previously. If you have multiple locations, enter the location code of the default location for the company. Once saved, the location code can't be edited.
    1. Type a location code and change the start date or end date. 
    2. The Type defaults to Location.
    3. Select a Category for this location.
    4. The Default Outlet Code of this location is selected and unavailable because this is the first location for this company.
    5. Optionally, type a Location Description.
    6. Complete at least the required fields.
    7. Click Validate to validateHoverTT.png the address information.
    8. AvaTax selects and displays the tax jurisdictions for this location.
    9. Type additional location information depending on the address for the locationHoverTT.png.
      • If you are not a Returns client, when asked “Is this specific location registered with the proper taxing authorities to report sales and use tax?”, accept the default value No and click Next to move to the next screen.
      • If you are Returns​ client, when asked “Is this specific location registered with the proper taxing authorities to report sales and use tax?”:
        • Accept the default value No and click Next to move to the next screen. Choosing No makes the Outlet Name and DBA Name optional.
        • Select Yes and complete the screen as required, based on the city and state information associated with this location. Choosing Yes makes most fields required. Generally, a good resource for this information is the hard copy return provided by the taxing jurisdiction.
  13. Designate a company as a test company to use it for testing purposes only. Test companies don’t generate liability worksheets, Returns calendars, or tax notices. When you’re done testing, change this value to No to use the company for actual transactions. Use a test company to test:
    • Integration of AvaTax with your accounting software. For instance, use it to send a test transaction.
    • Changes to the tax profile of a company.
    • Data importing.
  14. You must activate a company before AvaTax processes transactions and validates addresses. For more information, see activate a company. Review the companyHoverTT.png information for errors or omissions.
    1. To change or add information, click Back to reach the appropriate screen.
    2. Once the company information is verified, click Finish to save the company.
    3. Click Print Preview to view or print a summary of the company and account information.