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Avalara Help Center

Manage Taxability of Products and Services

Apply tax codes to manage item taxability. Assigning product and product categories to items gives you important jurisdictional subtlety in taxability. Avalara has predefined Avalara tax code with a taxability profile in place for all US states. Or, create your own custom tax codes and tax rulesHoverTT.png in AvaTax. Keep in mind that Avalara updates Avalara tax code when taxability rules change, but custom tax codes and rules are maintained by you; they're not updated when tax laws change. Also, make sure you enable nexus in the jurisdictions where you're required to register and collect tax so AvaTax calculates the full tax amount.

Map items to tax codes

  • A tax code is a unique code for similar products, services, or charges that tells AvaTax what kind of sales tax, if any, to charge for them. 
  • It's a best practice to map items to tax codes in your accounting software. .
  • If you can't pass a tax code from the item management screen, or if you need a remotely-hosted mapping system to accommodate multiple integrations, map the items to tax codes in AvaTax.
  • If you map in your accounting software and AvaTax, the AvaTax mapping supersedes any mapping in your accounting software.
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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:

  1. Go to Products and click on the product you want to map to a tax code.
  2. In the Product Details page, click Edit to edit the details.
  3. 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.
  4. Click Save.

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