Products and services may be taxed differently when they're used in multiple tax jurisdictions, such as software used by employees in different states. Create an advanced tax rule to identify transactions that should be calculated by more than one address and distribute the tax across each point of use.
Before you begin
If the rule you want to create applies to a custom tax code, create the custom tax code first.
- In AvaTax, go to Settings > All AvaTax Settings.
- Next to Custom Rules, select Manage.
- Select the Advanced Rules tab and then select Add an Advanced Rule.
- Select the Multiple Points of Use Allocation rule.
- Enter the rule information.
- 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.
- If the calculated tax should be returned to your business application as a single line, check Return Allocated Tax on a Single Line.
- Under When, set the conditions that will trigger the rule.
- Field: This can be the transaction's ship to state, description, item code, tax code, or customer 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.
- Under Allocate, add any address where tax should be calculated. Allocation percentages must add up to 100%.
- Select Save Advanced Transaction Rule.
- 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.