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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 an item to a tax code

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.

 

How Do I Map Tax Codes - Final.png

To map an item to a tax code:

  1. In Microsoft Dynamics AX 2012, go to Avalara AvaTax > Setup > Configuration Setting > General > General Options.
  2. Select Tax Mapping Code, and then click the Tax Code Mapping button that displays.
  3. In the Tax Code Mapping window:
    1. Select the Document Type.
    2. Select the Item/Category/Account as applicable.
    3. Enter the Taxability Code. You can use an Avalara tax code or a custom tax code.
    4. Click Close.
  4. Click Save.

Map an item to a UPC

Instead of using Avalara tax codes, send the model number or the UPC from your accounting software to AvaTax Update. If the UPC isn't available, the model number is set as the default and sent to AvaTax Update. To customize taxability for specific products, items need to be mapped to UPCs and model numbers. 

To send a UPC to AvaTax Update, make sure Use UPC as Item Code is enabled in AvaTax Update for Microsoft Dynamics AX 2012 configuration.

To map an item to a UPC:

  1. In AvaTax Update for Microsoft Dynamics AX 2012, go to Product Information Management > Common > Released products, and then double-click the row of the item you want to map to a UPC.  Item details display.
  2. Go to Manage Inventory > Warehouse, and then click GTIN codes. The Item GTIN Codes page opens.
  3. Add the UPC (also called as GTIN codes) details for this item, and then close the Item GTIN Codes page.
  4. Go to Accounts Receivable > Common > Sales Orders > All Sales Orders. The All Sales Orders page opens.
  5. Go to Sales Order > New, and then click Sales Order. The Create Sales Order page opens.
  6. Select the Customer account, and click OK. The Sales Order page opens.
  7. In the Item Number column for the item, type the UPC/GTIN.
  8. To review sales tax details, go to Sell > Tax, and click Sales Tax. The Sales Tax window opens with a table that displays sales tax details.
  9. To create an invoice for the sales order, on the Sales Order page, on the Invoice tab, click the Invoice button, create the invoice, and then click OK to post the invoice to AvaTax Update. 

Map product classes to a tax code

Product class item mapping refers to the ability to link a single tax code to a collection of item numbers or SKU’s within an ERP system. The benefit of being able to use product class item mapping is that you can assign one code to tens, hundreds, or thousands of SKU’s in a single instance, which is ideal for companies that have an extensive product catalog. Another benefit is that you can readily monitor and keep track of your item master list within your accounting software without having to maintain an item mapping matrix outside of your item master list.

Map tax codes to a product class

The Tax Code Mapping utility in AvaTax Update for Microsoft Dynamics AX lets you look up and select tax codes and map them to items. There are two ways to map one tax code to a collection of items.

To map tax to items, follow one of these two steps:

  1. Option 1:
    1. Open AvaTax Update for Microsoft Dynamics AX.
    2. Navigate to Administration.
    3. Locate AvaTax.
    4. Click + in front of Setup.
    5. Click Configuration Settings.
    6. Select the General tab.
    7. Click Tax Code Mapping. Follow these steps in the form:
      1. Click in the grid.
      2. Add new:
        • Click New icon,
        • Press Ctrl+N, or
        • Click File and select New.

          AX-product item class mapping.png

      3. In the Document Type column, click the menu and scroll through the list of Types you can map to. Select the desired type.

      4. In the Item/Category/Account column, click the menu and select the appropriate Category you want to map.

      5. In the Taxability column, enter the AvaTax code you want to use.

      6. Click the Save icon.

    8.        Exit the form.

    9. Exit Configuration.

  2. Option 2:
    1. Open AvaTax Update for Microsoft Dynamics AX.
    2. Navigate to Administration.
    3. Locate AvaTax.
    4. Click + in front of Utilities.
    5. Click Tax Code Mapping.
      1. Click in the grid.
      2. Add new:
        • Click New icon,
        • Press Ctrl+N, or
        • Click File and select New.

          AX-product item class mapping.png
      3. In the Document Type column, click the menu and scroll through the list of Types you can map to. Select the desired type.
      4. In the Item/Category/Account column, click the menu and select the appropriate Category you want to map.
      5. In the Taxability column, enter the AvaTax code you want to use.
      6. Click the Save icon.
    6. Exit the form.
    7. Exit Configuration.

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