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Avalara Help Center

What You Sell

Some products and services are taxed differently in different jurisdictions. Apply Avalara tax codes to products and services you sell to help account for this varying taxability. There are a few different ways you can apply, or map, Avalara tax codes to your products and services:

  • Map items to predefined Avalara tax codes; associate a code with each item you sell so AvaTax Update knows which tax rate to apply 
  • Map items to universal product codes (UPCs)

Items that aren't mapped to Avalara tax codes are treated as Tangible Personal Property (TPP), and are fully taxed during calculation.

Map items to tax codes

The process is simple. 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. For more information about Avalara tax codes, see Select Avalara Tax Codes.

Avalara recommends you map items to Avalara tax codes in your accounting software. To learn how to map Avalara tax codes in your accounting software, check your accounting software documentation. See our handy chart for a little guidance deciding whether you should map items to Avalara tax codes in your accounting software or in AvaTax Update. To map items to Avalara tax codes in AvaTax, 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 you have to maintain your own custom tax codes and rules; these 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 UPCs (universal product codes), you don't need to use Avalara tax codes because UPCs already have taxability rules associated with them.

If you map in your accounting software and in AvaTax Update, the mapping in AvaTax Update overrides any mapping in your accounting software.

 

How Do I Map Tax Codes - Final.png

  1. Click File > AvaTax > Preferences.
  2. On the Taxability tab, click Item Tax Code Mapping and complete the following fields:
    • Next to the Item Type field, select All from the drop-down menu
    • Next to Item Name, select the Item from the drop-down menu
    • In the Tax Code field, type the Tax Code
  3. Click Add, and then click OK.
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