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Map Items to Tax Codes

This article applies to:Avalara AvaTax

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 and tax rulesHoverTT.png in 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. Mapping items to tax codes informs AvaTax  which tax rules to use when processing transactions that include the mapped items. There are 3 ways to map your items. You can map them in AvaTax or your accounting software; or choose to map groups of items to a single tax code in certain accounting systems.

  • A tax code is a unique code for similar products, services, or charges that tells AvaTax what kind of sales tax, if any, to charge for them.
  • It's a best practice to map items to tax codes in your accounting software. Find your integration to learn how to map tax codes in your accounting software.
  • If you can't pass a tax code from the item management screen, or if you need a remotely-hosted mapping system to accommodate multiple integrations, map the items to tax codes in AvaTax.
  • If you map in your accounting software and AvaTax, the AvaTax mapping supersedes any mapping in your accounting software.
How Do I Map Tax Codes - Final.png

Map items in AvaTax

Map one or more items to tax codes in AvaTax.

  1. On the Organization tab, click the Items button items.gif for a company.
  2. On the Items screen, select the check box next to the items that you want to map to the same code.
  3. Click Map.

    AvaTaxCalc-Organization-TaxProfile-ClickMapItem.png
  4. On the Map Item(s) to Tax Code screen, make sure the Item List shows the items you want to map:
    • To remove items, select the items and click Remove 
    • To restore the list, click Reset 
    • To add items, click Cancel and re-select the items you want to map
  5. In the Tax Code Picker, find the tax code you need by entering data for any or all of the following:
    • Tax Code
    • Description
    • Type
    • Category: Select AvaTax to choose from our list of AvaTax Sytem Tax Codes or select Custom to use your own custom tax code.
      TaxCodePickerFields.png
  6. Click the Search button to find the appropriate tax codes.
  7. In the filter results, click the Expand button Picture of the expand button next to each group of tax codes. 
    TaxCodePickerSearchResults.png
  8. When you find the tax code you want to map to your items, click it to select it. Click Save. The items appear on the Items screen with the newly mapped tax code.

Map items in your accounting software

It's a best practice to map items to tax codes in your accounting software. Find your integration to learn how to map tax codes in your accounting software.

Product class item mapping

Product class item mapping refers to the ability to link a single tax code to a collection of item numbers or SKU’s within an ERP system. The benefit of being able to use product class item mapping is that you can assign one code to tens, hundreds, or thousands of SKU’s in a single instance, which is ideal for companies that have an extensive product catalog. Another benefit is that you can readily monitor and keep track of your item master list within your accounting software without having to maintain an item mapping matrix outside of your item master list.

Use product class item mapping