Some products and services are taxed differently in different jurisdictions. Associate pre-defined Avalara tax codes with each product and service you sell so AvaTax Update knows what tax rate to apply in each jurisdiction. Items that aren't mapped to Avalara tax codes are treated as tangible personal property, and are fully taxed during calculation.
Map Avalara tax codes to your products either in your accounting software or in AvaTax Update.
Map items to tax codes
Map items to Avalara tax codes, and when your accounting software processes transactions, or when you upload the transactions to AvaTax Update, AvaTax Update determines the taxability for the items you sell based on the rules behind these Avalara tax codes. Find the codes you need using the online Tax Code Search Tool.
You can map items to Avalara tax codes in your accounting software or in AvaTax Update. Usually, mapping them in your accounting software works better and takes less time. See our handy chart for a little guidance deciding whether you should map items to Avalara tax codes in your accounting software or directly in AvaTax Update.
To learn how to map Avalara tax codes in your accounting software, check your accounting software configuration documentation. To map items to Avalara tax codes in AvaTax Update, go to Settings > Manage Items With Special Tax Treatment.
Keep in mind that Avalara updates Avalara tax codes when taxability rules and laws change, but any custom tax codes and rules you create aren't automatically updated when changes occur. To be sure you're using the most current rules to tax your products and services, use Avalara tax codes. If you map your items to universal product codes (UPCs), you don't need to use Avalara tax codes because UPCs already have taxability rules associated with them.
If you map in both your accounting software and in AvaTax Update, the mapping in AvaTax Update overrides any mapping in your accounting software.
Map items in your accounting software
If you can, map items to tax codes in your accounting software rather than in AvaTax Update so that you can keep all the information about your items in one place.
Find your integration to learn how to map tax codes in your specific accounting software.
Map items in AvaTax Update
If you can't map items to tax codes in your accounting software, do it in AvaTax Update.
- Go to Settings > Manage items with special tax treatment
- If your items aren't in AvaTax Update yet, add them. If they are, click Details next to the item you want to map to a tax code.
- Type in the Avalara Tax Code box to search for a relevant tax code
- If you can't find what you're looking for, scroll down to the end of the suggestions list and click Browse the directory to search through the full list of Avalara tax codes
- Once you've found a tax code that matches the product or service you're selling, click Save to finish your work on the item