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Use Custom Tax Codes

This article applies to:Avalara AvaTax

Tax codes categorize items to determine their taxability (i.e. whether or not they're taxable) by jurisdiction. If a suitable Avalara tax code isn't available, use custom tax codes. Custom tax codes are, by default, fully taxable everywhere. You must add a custom tax rule to define the taxability of a particular code in a unique jurisdiction.

Add a custom tax code

If you can't find an Avalara tax code for your product, add custom tax codesHoverTT.png to group like kinds of products, services, digital goods, or charges together. Any tax code you create is considered a custom tax code.

Custom tax codes are, by default, fully taxable everywhere. You must add a custom tax rule to define the taxability of a particular code in a unique jurisdiction.

To add a custom tax code:

  1. On the Organization tab, click the Custom Tax Codes button Picture of the Tax Codes button for a company.
  2. On the Tax Codes screen, click New.
  3. On the New: Tax Code screen, complete these required fields:
    • Tax Code
    • Type
  4. Optionally, type a Description of the tax code.
  5. Click Save. The custom tax code appears on the Tax Code List. A success message displays above the tax code list. Next, add a custom tax rule for the tax code.

Map items to custom tax codes

The tax code picker lets you filter and map your items to Avalara tax codesHoverTT.png or custom tax codes from the Tax Code Picker dialog from within AvaTax. It's easiest to map your item to a tax code when you add the item to AvaTax.

To map items to custom tax codes after adding them to AvaTax:

  1. In AvaTax, click the Organization tab, and then click the Items button Picture of the Items button for a company.
  2. On the Items screen, click the item you want to map.
  3. Click the Browse button Picture of Browse button next to the Tax Code field. 
  4. In the Tax Code Picker dialog, search for a custom tax code by entering data for any or all of the following:
    • Tax Code
    • Description
    • Type
    • Category - this should be set to Custom 
  5. Click the Search button.
  6. In the filter results, click the Expand button Picture of the expand button next to each group of tax codes, if necessary.
  7. Click a Tax Code to select it and close the Tax Code Picker dialog.
  8. Click Save.

Delete a tax code

You can't delete a tax codeHoverTT.png if it's in use. For example, you can't delete it if an item is mapped to the tax code or if AvaTax has processed a transactionHoverTT.png using the tax code.

To delete a tax code:

  1. On the Organization tab, click the Custom Tax Codes button Picture of the Tax Codes button for a company.
  2. On the Tax Codes screen, select the check box next to any tax codes you want to delete.
  3. Click Delete.
  4. Click OK to confirm deletion.