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Avalara Help Center

Add custom tax settings

This article applies to:AvaTax for Communications

AvaTax for Communications allows you to adjust tax settings to customize how tax is calculated in some situations, and to select how to you want non-billable taxes and fees to be handled. The Recommended settings are applied by default, so you don't need to add custom tax settings if you plan to use the recommended settings.

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Important

This is currently a beta feature available only to some customers using the REST API. See this guide for more information.

Before you begin

Custom tax settings have to be assigned to a profile to be applied to tax calculations, so make sure you have created a profile before setting up your custom tax settings.

Steps

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Avalara recommends testing all customizations in your sandbox account before you add them to your production account. After you add customizations to your production account, run test transactions or use the tax determination calculator to make sure you receive the expected results before you complete any bill runs.
  1. In the Communications Customer Portal, select Settings.
    The Settings page opens.
  2. Next to Customizations, select Manage.
    The Customizations page opens.
  3. On the Profiles tab, select the Advanced Customizations tab.
  4. Select the Custom Tax Settings option beneath Advanced Customizations.
  5. Select Add Custom Tax Setting.
    The New Custom Tax Setting page opens.
  6. Enter a Custom Tax Setting Name.
  7. Select an option for the Tax on Tax setting.
    This option is used for calculation of taxes that are based on the tax amount of other taxes. AvaTax for Communications repeatedly calculates tax on the additional tax amount until that tax amount or taxable measure is less than half of one cent ($00.005). Refer to this guide for additional information on tax on tax calculations.
    Select one of the following options:
    • Iterate on tax amount (Recommended):This results in a medium tax-on-tax amount. It generally iterates 1 to 3 times to apply the additional taxes.
    • Iterate on taxable measure: This results in the highest tax-on-tax amount. It can iterate up to a dozen times to apply additional taxes.
    • Once: This results in the lowest tax-on-tax amount. It iterates a single time.
  8. Select an option for the Return Non-Billable setting.
    Non-billable items are compliance-only taxes or fees that are used for filing, and are not passed on to the end-user. This option allows you to specify if non-billable items should be included in the tax calculation details you receive from AvaTax for Communications.
    Select one of the following options:
    • No (Recommended): Non-billable taxes are included in compliance reports, but are not included in the tax calculation API response. If you use the AvaTax for Communications API call response to populate invoices for your customers, you can use this option to make sure you don't collect these non-billable taxes from your customers.
    • Yes: Non-billable taxes are included in the tax calculation API response, and in compliance reports.
  9. Assign the Custom Tax Settings to one or more profiles.
  10. Select Save Custom Tax Setting.

The customized tax settings are now used for tax calculation when you use one of the assigned Profile Numbers.

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