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 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 items to tax codes
- Click File.
- Click AvaTax.
- Click Configuration.
- On the General tab, click Item Tax Code Mapping.
- In the Item Code Mapping utility, complete the following fields:
- Next to the Item Type field, select All from the drop-down menu.
- Next to Item Name, select the Item from the drop-down menu.
- In the Tax Code field, type the Tax Code.
- Click Add.
- Click OK.