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Manage Taxability of Products and Services

This article applies to:Avalara AvaTax for Key2Act

Manage item taxability by mapping your inventory categories to AvaTax System tax codesHoverTT.png in AvaTax for Key2Act. By associating your items with tax codes, you can manage item taxability by product or product category, and allow for jurisdictional subtlety in taxability. Avalara provides predefined system tax codes, which already have a taxability profile in place for all US states. Alternatively, create tax codes in Key2Act or create your own custom tax codes and tax rulesHoverTT.png in the Admin Console. Keep in mind that Avalara automatically updates system tax codes when taxability rules change in various jurisdictions, but custom tax codes and rules are user-maintained; they're not automatically updated when tax laws change.

  • 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. To learn more about tax codes and how to use them, read what is a tax code? 
  • It's a best practice to map items to tax codes in your accounting software. Find your integration to learn how to map tax codes in your accounting system.
  • 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 the Admin Console.
  • If you map in your accounting software and the Admin Console, the Admin Console mapping supersedes any mapping in your accounting software.
How Do I Map Tax Codes - Final.png

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. To learn more about tax codes and how to use them, read what is a tax code?

  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.

      ServiceManagementTaxCodeAssignmnet.png

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