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Manage Taxability of Products and Services

This article applies to:Avalara AvaTax for Open Cart

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 products 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 tax rulesHoverTT.png 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:

  1. In the OpenCart admin panel, go to System > Localisation > Taxes > Tax Classes.
  2. On the Tax Classes page, click Add New (+) to add a tax class.
  3. On the Add Tax Class page, type the Tax Class Title as Non Taxable and give a suitable description. Click Save.

    OC_Sales_Tax_Non_Taxable_Add_New_Class.png

  4. On the Tax Classes page, this new tax class is now added to the Tax Class List.
  5. To assign the non-taxable class to a product:
    1. Go to Catalog > Products
    2. Select the product and click Edit
    3. On the Edit Product page, go to the Data tab and in Tax Class, select Non Taxable and click Save.

    OC_Sales_Tax_Non_Taxable_Product_Assignment.png

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.

OC_Sales_Tax_Non_Taxable_Admin_Console.png

Map items to UPCs

For an item, you can choose to send the model number, the UPC (Universal Product Code), or the SKU from OpenCart to AvaTax. If  the UPC or SKU is not available, the model number is set as the default and sent to AvaTax. 

To customize taxability for specific products, tax codesHoverTT.png need to be mapped to SKUs, UPCs, and model numbers. Items not mapped to tax codes are treated as Tangible Personal Property (TPP) and fully taxed during calculation. Avalara has additional options available to help with product taxability, including Avalara tax codes and UPC content.

Using this feature may cause additional fees. Talk to your Customer Account Manager (CAM) for more information.

Define a product

The model number, SKU, or UPC are added when a product is defined. To define a product, follow these steps:

  1. Log in to OpenCart using Admin credentials.
  2. In the menu, select Catalog > Products.
  3. On the Product page, select the product and click Edit.
  4. On the Edit Product page, click Data and add the UPC for this product. Click Save.

    OC_UPC_Product_Assignment.png

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. 

Note:
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:

  1. Log in to OpenCart using Admin credentials.
  2. In the menu, select System > Settings. Click Edit to add/edit your store details
  3. On the Settings page, select the Avalara tab. Go to Customer Specific settings and select Send Model Number / UPC / SKU to AvaTax as UPC. Click Save.

    OC_UPC_Configuration_Selection.png

  4. In the Admin Console, the transaction details displays the item code and the tax code for a product.

    OC_UPC_Product_Admin_Console.png

Next 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.