Many states require you to collect and remit sales tax after certain amount of sales or transactions even if your business doesn't have a physical presence there. Based on your company's transaction data, AvaTax Update keeps track of when your business exceeds these sales tax thresholds, helping you decide when you need to register in a new state.
If you might have exceeded a threshold, you'll see an alert on the home page:
Keep in mind that AvaTax Update doesn't know the full scale of your business, so this data may be incomplete. Always double-check these suggestions with Avalara Tax Advisory Services or your own tax experts before registering your business in a new jurisdiction, and research local tax laws in states where it looks like you're approaching the threshold.
More on how it works:
- AvaTax Update uses only committed sales invoices to estimate where you need to register to collect and remit sales tax.
- Sale totals are the sum of all sales invoices in US dollars for relevant goods and services, minus any credits from return invoices. Some states calculate their economic thresholds based on "gross sales," not including credits from return invoices, so keep a close eye on states where it looks like you're approaching the threshold, and check the laws in the states where you do business.
- Tax-exempt sales may be included in some regions, because AvaTax Update doesn’t differentiate between taxable and tax exempt sales if you haven’t registered to collect and remit in the jurisdiction.
- In California, AvaTax Update only tracks thresholds for the state, not for the local jurisdictions within it, which may have different rules.