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 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, AvaTax determines the taxability for the items you sell based on the rules behind these 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.
Keep in mind that Avalara updates Avalara tax codes when taxability rules and laws change, but you have to maintain your own custom Avalara 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, the mapping in AvaTax overrides any mapping in your accounting software.
Before you map your product to a tax code in AvaTax for Accounting Seed for Salesforce, ensure that the Enable Tax Code Mapping is enabled in the AvaTax Settings page. To map a product to a tax code, follow these steps:
- Go to Products and click on the product you want to map to a tax code.
- In the Product Details page, click Edit to edit the details.
- In the Tax Code field, type the applicable tax code. This code is sent to AvaTax only if the Enable Tax Code Mapping is enabled in the AvaTax Settings page. The default tax code P0000000 is sent to AvaTax if this option is disabled.
- Click Save.
Map items to UPCs
Instead of using Avalara tax codes, you can choose to send the model number or the UPC (universal product code) from your accounting software to AvaTax. If the UPC isn't available, the model number is set as the default and sent to AvaTax. To customize taxability for specific products, items need to be mapped to UPCs and model numbers.
To enable the UPC service in Accounting Seed for Salesforce, follow these steps:
- In the menu, select Avalara > Setup > Configure Avalara. Click Edit to add/edit details.
- On the Avalara Settings page, go to Tax Calculation settings and select Enable UPC Code as ItemCode. Click Save.
- In the Admin Console, the transaction details displays the product code and the tax code for a product.
Define a product
The product code or UPC are added when a product is defined. To define a product, follow these steps:
- Go to Product > Products.
- On the Products page, select the product and click Edit.
- On the Edit Product page, add the UPC for this product. In a product definition, the Product Code is a mandatory field and the default value in the product details. The product code is sent to AvaTax if the UPC is not available. AvaTax for Accounting Seed for Salesforce automatically truncates the number to 50 characters before sending it to AvaTax if the number exceeds 50 characters. For Product Code, you can use tax rules and codes. For a valid UPC, the tax rule and code is sent by the UPC service. If the UPC is invalid, the UPC service sends the default tax code P0000000.
- Click Save.