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 codes with a taxability profile in place for all US states. Or, create your own custom tax codes and in AvaTax. Keep in mind that Avalara updates Avalara tax codes 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 non-taxable class
To avoid calculating tax on certain products, assign them a non-taxable class. You can either create tax codes in OpenCart or create your own custom tax codes and in the Admin Console. 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. To assign a non-taxable class to a product, follow these steps:
- In the OpenCart admin panel, go to System > Localisation > Taxes > Tax Classes.
- On the Tax Classes page, click Add New (+) to add a tax class.
- On the Add Tax Class page, type the Tax Class Title as Non Taxable and give a suitable description. Click Save.
- On the Tax Classes page, this new tax class is now added to the Tax Class List.
- To assign the non-taxable class to a product:
- Go to Catalog > Products
- Select the product and click Edit
- On the Edit Product page, go to the Data tab and in Tax Class, select Non Taxable and click Save.
Now whenever this product is selected, sales tax is not calculated on this product. Tax is only calculated on amounts like Handling Fees and Flat Shipping Rate as applicable.
Map items to UPCs
For an item, 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,need to be mapped to UPCs, and model numbers. Items that aren't mapped to tax codes are treated as Tangible Personal Property (TPP), and are fully taxed during calculation.
Define a product
The model number, SKU, or UPC are added when a product is defined. To define a product, follow these steps:
- Log in to OpenCart using Admin credentials.
- In the menu, select Catalog > Products.
- On the Product page, select the product and click Edit.
- On the Edit Product page, click Data and add the UPC for this product. Click Save.
In a product definition, the Model is a mandatory field and the default value in the product details. The model number is sent to AvaTax if the UPC or SKU is not available. AvaTax for OpenCart automatically truncates the number to 50 characters before sending it to AvaTax if the number exceeds 50 characters. For Model number and SKU, 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.
The UPC is applicable only if the UPC service is activated in the Admin Console for the customer’s account.
Enable UPC service in OpenCart
To enable the UPC service in OpenCart, follow these steps:
You're almost finished setting up your integration. All you need to do now is send a test transaction from OpenCart to AvaTax to make sure you're accurately calculating sales tax.