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Local jurisdictions

This article applies to:Avalara AvaTax Update

If you collect and pay tax in any of the following states, you must select local authorities for AvaTax Update to accurately calculate tax for the counties, cities, or special tax jurisdictions within them.

  • Alabama
  • Alaska
  • Arizona
  • California
  • Colorado
  • Idaho
  • Louisiana
  • Mississippi
  • Texas

Your customer may be responsible for paying use tax if you don't collect tax for these local jurisdictions.

When you tell AvaTax Update to collect tax in one of the states listed above, you're prompted to add any optional local authorities. Add local authorities by entering an address or by selecting them from a list. To change where you collect and pay tax, go to Settings > Where You Collect Tax.

What if I'm not sure where my company collects and pays tax?

What does Automatically Update Authorities do?

What if I don't need to add local collection authorities?

Here's a summary of how AvaTax Update handles local jurisdictions the states listed above. Review the for each state summary before altering your settings in AvaTax Update.

Alabama

AvaTax Update lists all local jurisdictions, including state-administered, third-party-administered, and self-administered. Select the check box next to a local jurisdiction only if you're required to collect in that jurisdiction.

Alaska

All local jurisdictions listed are self-administered. Select the check box next to a local jurisdiction only if you're required to collect in that jurisdiction. To collect tax in Alaska, you must add local jurisdictions.

Arizona

All local jurisdictions, other than local reservation districts, are state-administered. By default, AvaTax Update selects all local jurisdictions for you.

To view or change the local jurisdictions where you collect:

  • Go to Settings > Where You Collect Tax. Locate Arizona and click Details
  • By default, AvaTax Update automatically updates your collection authorities if boundaries change or optional locals are added. Turn this off if you want to edit local collection authorities yourself.

The Arizona license type you initially apply for determines whether you file a transaction privilege tax (Tax type: Sales tax) or use tax (Tax type: Sales or sellers use tax) form. If you file use tax, no county tax is calculated.

California

All local jurisdictions are state-administered. Local jurisdictions listed represent those on the state’s District Tax Schedule (supplemental schedule to state return). By default, AvaTax Update selects all local jurisdictions for you. You can change this if you need to.

Per the state:

  • As a seller, you must collect, report, and pay district sales tax (called a transaction tax) or use tax on your taxable sales and leases if you:
    • Have a business location or are engaged in business within the district;
    • Lease, store, or consume tangible personal property in the district; or
    • Sell or lease vehicles, undocumented vessels, or aircraft that will be registered in the district.
  • You're engaged in business in a district if you are a retailer who:
    • Maintains, occupies, or uses any type of office, sales room, warehouse, or other place of business in the district, even if it is used temporarily, indirectly, or through an agent; or
    • Has any kind of representative operating in the district for the purpose of making sales, making deliveries, or taking orders; or
    • Receives rental income from leases or tangible personal property located in the district.

There are some differences between the rules that apply to the payment of taxes in districts and the payment of sales and use taxes in general. You should refer to Publication 44 (tax tips for district taxes) for more information.

Colorado

In most cases, AvaTax Update automatically selects and maintains local jurisdictions that are considered mandatory or compulsory but does not select optional jurisdictions. The exception to this scenario is Colorado.

A compulsory local jurisdiction is one that requires collection of tax if you have nexus in the state. Since these jurisdictions are compulsory, they can't be selected. See How to prepare for the December 1, 2018 Colorado sales tax changes.

AvaTax Update lists all local jurisdictions, both state-administered and self-administered. Counties are always state-administered.

Complicated formulas exist for intrastate transactions.

  • If shipping from and to the same city, your business needs to calculate city tax if the local jurisdiction is state-administered (or if the local jurisdiction is self-administered and your business is registered in that jurisdiction).
  • If shipping from and to a different city, your business does not need to collect city tax.
  • If shipping from and to the same county, your business needs to calculate county tax.
  • If shipping from and to a different county, your business does not need to collect county tax.

The only state-administered jurisdictions that are required for out-of-state sellers are transit-related special taxing jurisdictions.

Idaho

All local jurisdictions listed are self-administered. Select the check box next to a local jurisdiction only if you're required to collect in that jurisdiction.

Louisiana

All local jurisdictions are self-administered, including parishes and their special tax jurisdictions. Be sure to select special tax jurisdictions that apply to parishes. City jurisdictions are administered by the parishes. Select the parish where a city is located to calculate city taxes.

Mississippi

AvaTax Update selects and maintains the local jurisdictions that are considered required. Be sure to select any optional local jurisdictions.

Texas

All local jurisdictions are state-administered. By default, AvaTax Update selects all local jurisdictions for you.

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