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Install and Configure Avalara AvaTax for Microsoft Dynamics 365 for Operations

After you activate AvaTax and set up your company profile, install and configure AvaTax for your accounting software. During configuration, customize your setup to fit your unique business needs for things like:

  • Tax calculation settings for various tax types
  • Exemption settings if you have exempt customers
  • Product taxability settings

Alter these settings when your business needs change.

Download AvaTax for Microsoft Dynamics 365 for Finance and Operations, Enterprise edition

To connect your accounting software to AvaTax, download your integration software. 

  1. In AvaTax, on the Home tab, click Get Started.
  2. In the Download and Install Your Integration Software section, click Download Software
  3. In the Download Your AvaTax Connector Software window, click the arrow next to the name of your software, and then download the latest version of your integration. If the file isn't available for download, clear your browser's cache, and log back into AvaTax.
  4. Save the .zip file somewhere on your computer that's easy to find.
  5. Right-click the .zip file and extract the installation folder or file (.exe or .pdf or .msi). 

Install

It's recommended to contact Avalara Professional Services before you install and configure AvaTax for your accounting software.

Account setup

To set up AvaTax for Microsoft Dynamics 365 for Finance and Operations, Enterprise edition:

  1. Log in to Microsoft Dynamics 365 for Finance and Operations, Enterprise edition and go to Avalara AvaTax > Setup > AvaTax Setup Assistant.
  2. On the Avalara account credentials page, fill in the following, and then click Verify Credentials:
    Field Action
    • Account Number
    • License Key
    Use the information provided in an email from Avalara (sent to the email account you used to activate your AvaTax account)
    • Username 
    • Password 
    Use the same ones you use to log into your AvaTax account
    Service URL Make a selection based on your account type
  3. In Company Code, type the company code you created when you activated your AvaTax account, and then click Next.
  4. To use AvaTax to calculate tax on transactions, on the Map Sales Tax Group page, complete the following, and then click Next
    1. Next to Sales tax group, select AVATAX.
    2. Optional: To update the sales tax group, click Tax Group Code Mass Update, and then select the Customer/Vendor, Sales tax group, and Range.
  5. On the Enable Address Validation page, select the countries for which you want address validation enabled (available in US and Canada), and then click Next.
  6. Click Test Calculating Tax, and then click Finish. If you receive an error message, verify your credentials and try again.
     

Set up sales tax accounts

To set up sales tax accounts:

  1. Go to Tax > Setup > Sales tax > Ledger posting groups. Choose the correct Sales Tax Accounts to use with AvaTax.
  2. Refresh any workstation that was open while running the Setup Assistant to ensure it's updated with the most current AvaTax configuration settings.

Configure

To configure your company settings:

  1. Go to Avalara AvaTax > Setup > Configuration Setting.
  2. On the Avalara account credentials tab, click Edit Settings to add or modify the following information, and then click Verify Credentials. You must supply the AvaTax license key to verify your credentials.
    Field Action
    • Account Number
    • License Key
    Use the information provided in an email from Avalara (sent to the email account you used to activate your AvaTax account). The subject of that email is, Important! Your AvaTax Production Account Number & License Key.

    URL

    Make a selection based on your account type.
    Company Code This is the code you entered when you activated your AvaTax account. Every accounting software  that works with AvaTax uses a company code to identify itself to AvaTax. Here's some help if you can't find your company code in Microsoft Dynamics 365 for Finance and Operations, Enterprise edition.
  3. Complete or modify fields on the remaining tabs, using the following information, and then click Save:
    • The General tab:
      Section Field and description
      General Options
      • Display all warning messages: Select to enable warning messages. Error messages, however, are always displayed.
      • Tax Mapping Code: Select to enable the tax code mapping utility within the AvaTax menu in order to map to various document transaction types such as Item, Fee, Hour, Expense, Project Item, Ledger Account, Item Group, Procurement Category, and Sales category.
      • User Defined 1: Select to send non-tax data to AvaTax. Examples of this data are in the menu list.
      • User Defined 2: Select to send non-tax data to AvaTax. Examples of this data are in the menu list.
      • Enable Entity Use Code: Select to map entity/use codes to customer records to exempt them from sales tax.
      • Send Item account to AvaTax: Select to send general ledger account information for an item to AvaTax.
      • Use UPC as Item Code: Select to send a UPC instead of an item code to AvaTax. Using this feature may trigger additional fees. Talk to your Customer Account Manager (CAM) for more information. 
      Return Order Address Return Order Address: Select the address for return orders.
      Shipment Options Choose shipment details. Control the assignment of tax codes to additional charge items. Available additional charge items display in the table on the left and can be assigned to tax codes associated with freight or miscellaneous charge references found on the right side of the page.
      Adapter Options
      • Request Timeout (In seconds): Set the duration of request timeouts. Don't change this feature unless directed by Avalara Support.
      • Enable logging: Select this option to log AvaTax configuration changes. Don't change this feature unless directed by Avalara Support.

       

    • The Tax Calculation tab:
      Section Field and description
      General Options
      • Disable Tax calculation: Select to disable Microsoft Dynamics 365 for Finance and Operations, Enterprise edition using AvaTax to calculate tax on transactions.
      • Always check address before calculating tax: Select to force an address validation of the sales/billing document prior to tax calculation. Avalara recommends only enabling this option if you enter ship-to address on the fly during the Microsoft Dynamics 365 for Finance and Operations, Enterprise edition sales transaction entry process as using this feature could trigger additional fees.
      • Enable credit note / return order tax override date: Generally recommended to enable this option if you want to override the tax details for a credit note / return order.
      Tax Area Code
      • Sales tax group: Select the default sales tax group. The AVATAX sales tax group is suggested.
      • Tax Group Code Mass Update: Accesses a utility to perform a mass updates of the sales tax group code on a range of customers.

       

    • The Address Validation tab:
      Section Field and description
      General Options
      • Disable Address Validation: Select to disable Microsoft Dynamics 365 for Finance and Operations, Enterprise edition using AvaTax to validate addresses on transactions.
      • Return Results in Uppercase: Address validation results are returned in uppercase format.
      Perform Address Validation based on country names selected Select the specific countries in which AvaTax will validate addresses. These names are retrieved from your transaction records. AvaTax only validates addresses in the United States and Canada.
      Other Options Reset: Clears the Address Validated flag. Previously verified addresses are no longer recognized as validated.

       

    • The Consumer Use Tax tab:
      Section Field and description
      Consumer Use Tax Enable use tax assessment on vendor invoice: Select to enable Microsoft Dynamics 365 for Finance and Operations, Enterprise edition using AvaTax to calculate consumer use tax on vendor use tax transactions.
      Posting account 
      • Use tax liability account: Select to enable Microsoft Dynamics 365 for Finance and Operations, Enterprise edition using AvaTax to calculate consumer use tax on vendor use tax transactions.
      • GL Account to Debit: Select a relevant account from the drop-down list.
      • Use Tax Debit GL Account: Select a relevant account from the drop-down list.
      • Use tax journal name: Select a relevant account from the drop-down list.
      Taxability
      • Apply Avalara Goods and Service code mapped on item group when it's not available on an item: Select to send the item group details for an item.
      • Apply Avalara Goods and Service Code mapped on: Select the item.

       

    • The Project tab:
      Section Field and description
      Project Invoice Address Project Invoice Address: Select the appropriate project address for your invoice.
      Tax Calculate Calculate Tax on Advance: To calculate tax on advance payment transactions, toggle to Yes.