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Manage Taxability of Products and Services

This article applies to:Avalara AvaTax for Key2Act

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.

  • 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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Map category to tax codes

Before you map your category to a tax code in AvaTax for Key2Act, ensure that the Enable Tax Code Mapping is enabled in the AvaTax Settings page. 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. 

  1. In Key2Act, go to Administration > Setup > AvaTax for Key2Act Setup and click Service Management Tax code Setup.
  2. On the Service Management Tax Code Assignment page, Division and Call Type or User Defined Field selection reflects the choice made in Wennsoft Avatax Configuration > Tax Calculation Options. If User Defined field is selected, then add the following details:  
    1. Select the Division and the Call Type.
    2. Type a unique user-defined Assigned Tax Code for the selected Cost Description.
    3. Click Save.

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Your categories are now mapped to the tax code. You can now start calculating sales tax.