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Avalara Help Center

Change freight and handling taxability

This article applies to:AvaTax

In many states, the taxability of a freight charge depends on the taxability of the products being shipped. Adjusting the AvaTax freight and handling tax dependency settings allows you to control which line items are used to determine the taxability of freight, based on the line item addresses. If you're not sure which setting to use, leave the line-level freight and handling tax dependency off.

Steps

  1. In AvaTax, go to Settings > All AvaTax Settings.
  2. Next to Advanced Company Settings, select Manage.
  3. To change the way AvaTax calculates tax on freight and handling, select the option you want under Freight Handling Dependency, . 
    1. Leave line-level freight and handling dependency off to make the taxability of freight and handling dependent on all line items in the document, regardless of the addresses.
    2. Turn line-level freight and handling dependency on and select how close a match the destination address needs to be to the dependent line items.
    • Line Matches Freight Line State
      Select to make the taxability of freight and handling dependent on all line items that have the same destination state as the freight or handling line. For example,  if the freight line has a GA address, only line items shipping to GA are used to determine the taxability of freight.
    • Line Matches Freight Line Tax Region
      Select to make the taxability of freight and handling dependent on all line items that have the same destination tax region (same set of taxing jurisdictions) as the freight or handling line.
    • Line Matches Freight Line Address
      Select to make the taxability of freight and handling dependent on all line items that have the same destination address as the freight or handling line. 
  4. Select Save Settings. 
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