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Test with Basic and Advanced Tax Calculator

This article applies to:Avalara AvaTax

Use the tax calculators in AvaTax to:

  • Find tax rates. The calculator's results are based on your unique tax profile, including custom rules you've set up.  Because so many factors can impact tax rates, using one of the calculators is a great way to get an accurate rate.
  • Validate addressesHoverTT.png. Making sure the addresses you use for yourself and your customers are entered in a way that's valid for tax calculations helps ensure accurate taxes. Plus, validating a customer address helps ensure you're shipping your products to the right place.
  • Test tax scenarios such as custom tax codes and tax rules. If you're contemplating changes to your business, trying to figure out how tax codes and rules might impact your bottom line, or otherwise exploring how changing the variables involved in your taxes will change the taxes themselves, use the calculator to see what happens before you make any changes. You can also backdate your test scenarios to see a historic rate (based on the actual state of your nexus, tax rules, and rates on that date).

Calculate tax using the Basic Tax Calculator

The Basic Tax Calculator requires a minimum of information to calculate tax. Its best uses are finding tax rates or testing simple tax scenarios. Results display tax amounts, tax rates, and jurisdiction names.

To calculate tax using the Basic Tax Calculator:

  1. On the Tools tab, click Basic Tax Calculator.
  2. On the Tax Calculator screen, select a Company.
  3. Complete the Origin Address. At a minimum, type the Address 1 and ZIP/Postal Code, and then click Validate. The company address information from the Organization tab populates the Origin Address fields by default.
  4. Complete the Destination Address. At a minimum, type the Address 1 and ZIP/Postal Code, and then click Validate.
  5. Complete the Order Information.
    • At a minimum, type an Amount.
    • The following optional fields appear on the Basic Tax Calculator:
      • Item Code: A unique identifier for the item (product, service, or charge).
      • Item Description: A brief description of the product, service, or charge. Required for SST companies.
      • Amount: The extended currency price (quantity X unit price).
      • Entity Use Code: An identifier used to group like kinds of customers for exemption purposes. Select standard codes from a list.
      • Discount: The document-level discount to apply.
      • Tax Code: A unique identifier associated with items or tax rules to create custom taxing situations.
      • Date of Sale: The date the sample transaction takes place.
  6. Click Calculate. Repeat this step to recalculate after you make any changes. The results of the tax calculation display on the right of the addresses:
    • Jurisdiction Type: The taxing jurisdiction included in the tax calculation: state, county, city, or special taxing jurisdiction
    • Jurisdiction Code: Internal AvaTax identifier for the specific taxing jurisdiction
    • Jurisdiction Name: The name of the jurisdiction
    • Tax Type: 
      • Sales: For an intrastate transaction, shipping from one point in the state to another point in the same state
      • Use: For an interstate transaction
    • Tax Base: Taxable amount used in the tax calculation
    • Rate: The tax rate for the taxing jurisdiction
    • Tax: The tax amount calculated for the taxing jurisdiction

The results from the Basic Tax Calculator aren't saved.

Calculate tax using the Advanced Tax Calculator

The Advanced Tax Calculator mimics an invoice document with multiple lines. Its best use is testing advanced tax scenarios. For example, change the document type to purchase order to test consumer use tax. Results display tax amounts, tax rates, and jurisdiction names at a line-item level. You can also use an item code that uses UPC.

To calculate tax using the Advanced Tax Calculator:

  1. On the Tools tab, click Advanced Tax Calculator.
  2. On the Advanced Tax Calculator screen, select a Company.
  3. To add the origin addresses, click the Origin hyperlink, type or select an address, and then click Validate. Click OK.
  4. To add the destination address, click the Destination hyperlink, type or select an address, and then click Validate. Click OK. If you don't enter an address, AvaTax uses the origin address as the destination address.
  5. On the Document tab, complete at least the required fields.
  6. The following fields appear on the Advanced Tax Calculator’s Document tab:
    • Customer/Vendor Code: The code used by the accounting, ERP, e-commerce, m-commerce, or POS application to uniquely identify a customer or vendor.
    • Document Date:  The date associated with the document. The document date is used for:
      • Tax calculation date
      • Reporting date associated with the document
    • Discount: The document-level discount amount to be applied.
    • Currency: The currency type used in the document.
    • Exemption No (Number): The exemption certificate entry number associated with this customer.
    • Buyer's VAT No (Number): The VAT number of the buyer.
    • Reference Code: A user-defined field for reference purposes only. The reference code can be used to refer to a corresponding document number in an accounting, ERP, e-commerce, m-commerce, or POS application.
    • Entity Use Code: An identifier used to group like kinds of customers for exemption purposes. Select standard codes or type a custom code.
    • Purchase Order No (Number): The purchase order number assigned by the accounting, ERP, e-commerce, m-commerce, or POS application.
    • Salesperson Code: The salesperson identifier assigned by the accounting, ERP, e-commerce, m-commerce, or POS application.
  7. To add one or more lines, on the Lines tab, click Add New Line and, at a minimum, complete these fields for the new line:
    • Amount
    • Quantity
    • Line No
  8. Click Add.
  9. Click Calculate Tax. Repeat this step to recalculate after you make any changes. The results of the tax calculation display at the bottom of the Document tab and inside each line, including information about the:
    • Tax amounts
    • Tax rates
    • Jurisdictions

The results from the Advanced Tax Calculator aren't saved.