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Local jurisdictions

This article applies to:AvaTax

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

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

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

When you tell AvaTax 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. If you're not prompted to add local authorities when you add a state in the Where you collect tax menu, it means that all local jurisdictions in the state are state-administered, and you don't need to add them separately.

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 handles local jurisdictions in the states listed above. Review the information for each state summary before altering your settings in AvaTax. If you're not sure whether you need to collect tax in a local jurisdiction after reviewing this information, speak with your tax professional.

Alabama

AvaTax 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. Alaska doesn't collect sales tax at the state level, so you must add local jurisdictions to collect tax in Alaska.

Arizona

All local jurisdictions, other than local reservation districts, are state-administered. By default, AvaTax 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 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

The statewide base sales and use tax rate is 7.25%, and is made up of both state and local taxes:

  • State: 6%
  • Local Transportation fund (county of place of sale or use): 0.25% (In AvaTax, the jurisdiction type is County)
  • Local Jurisdiction (City or county of place of sale or use): 1% (In AvaTax, the jurisdiction type is Special. The jurisdiction name includes “Local Tax SL.”)

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 selects all local jurisdictions for you. You can change this if you need to, although the local taxes included in the 7.25% base rate can't be disabled.

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. Refer to Publication 44: District Taxes (from California's Tax Resources page) for more information.

Colorado

Many local jurisdictions are state-administered and compulsory. Businesses with nexus in Colorado are required to collect tax in the state-administered jurisdictions, so they can't be disabled separately. All county jurisdictions are state-administered.

Colorado also has a number of self-administered "home-rule" cities. AvaTax lists all self-administered local jurisdictions. Select the check box next to one of the self-administered local jurisdictions only if you're required to collect in that jurisdiction.

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.

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 selects and maintains the local jurisdictions that are considered required. Be sure to select any optional local jurisdictions where you're required to collect tax.

Washington

All local jurisdictions are state-administered for collection of sales tax, which means you don't need to select local jurisdictions in Settings > Where you collect tax. You may need to register with local jurisdictions separately to report business and occupation (B&O) tax.

Avalara files state-level B&O tax with the Managed Returns service, but filing B&O tax in local jurisdictions is supported only with the Managed Returns Premium service. Contact your Account Manager if you're interested in learning more about the Managed Returns Premium service.

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