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Create an advanced tax rule to apply separate tax codes to bundled items

This article applies to:AvaTax

Products and services may be taxed differently when they're sold in a bundle, such as a gift basket containing taxable goods and tax-exempt foods. Create an advanced tax rule to identify transactions that contain bundled items and split the tax into multiple lines. 

Before you begin

Advanced rules for marketplace transactions are available to all users. To use find and replace or allocation rules, contact your account manager.

If the rule you want to create applies to a custom tax code, create the custom tax code first.
 

Steps

  1. In AvaTax, go to Settings > All AvaTax Settings.
  2. Next to Custom Rules, select Manage.
  3. Select the Advanced Rules tab and then select Add an Advanced Rule.
  4. Select the Bundled Items Allocation rule. 
    • Select an effective date when the rule should start applying to your transactions. Select an expiration date if this rule should only be used for a certain period of time.
    • Enter a descriptive name that makes the rule easy to find.
    • Check the document types this rule should apply to.
    • Choose whether you want to collect all of your bundled items tax on a single line, or split it between multiple lines in the bundle (this doesn't change tax calculation, just how the tax shows up when you're looking at your transactions).
    • If this rule should be applied before or after another rule, select the order and search for the tax rule by its name.
  5. If the calculated tax should be returned to your business application as a single line, check Return Allocated Tax on a Single Line.
  6. Under When, set the conditions that will trigger the rule. 
    • Field: This can be the transaction description, item code, or tax code.
    • Operator: A mathematical measurement of the value. For example, greater than or less than.
    • Value: The field value that's measured by the operator. 
  7. Under Allocate, add tax codes based on the number of lines that are needed to calculate tax. Allocation percentages must add up to 100%.

    Example
    2020-03-20_16-20-08.png
  8. Select Save Advanced Transaction Rule.
  9. Use the tax calculator to test your tax rule.

To apply your rule to past transactions, resend transactions from your business application or recalculate the transaction.

This rule splits a single line item on a transaction into multiple line items, using the tax codes that you set.

See also

Test your setup