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Avalara Help Center

Manage Taxability of Products and Services

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.

  • 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. 
  • It's a best practice to map items to tax codes in your accounting software.
  • 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 AvaTax.
  • If you map in your accounting software and AvaTax, the AvaTax mapping supersedes any mapping in your accounting software.
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Map items to tax class

Assign a tax class to an item to indicate whether it is taxable or not in Sage Sales Tax for Sage 100 Powered by AvaTax. You can set it to apply every time an item uses Sage 100 item taxability via the Tax Class field associated with your items.

Assigning a tax class of TX to an item indicates that it is taxable, and assigning a tax class of NT indicates that it is nontaxable. Follow these steps so that it applies every time an item is sold:

  1. Go to Inventory Management > Main > Inventory Maintenance. Click the Magnifying Glass and select the desired item.
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  2. In the Inventory Maintenance dialog, click the Options tab.
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  3. Next to Tax Class, click the Magnifying Glass.
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  4. In the Sales Tax Class Maintenance dialogue, click the appropriate Tax Class for that item and click Accept.
    • The change is displayed in Options tab.

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