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Update where you collect and pay tax

This article applies to:Avalara AvaTax Update

The legal term for where your company is obligated to collect and remit sales tax is "nexus." When you set up AvaTax Update, you add regions (countries, provinces, states, or territories) and local authorities (cities, counties, or special tax jurisdictions) to tell AvaTax Update when and where to calculate and report taxes for your company.

Learn more about activities obligate your business to collect and remit sales tax

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

We don't recommend deleting a region or local authority unless it was added by mistake. Instead, change the end date for the jurisdiction to today's date. This way AvaTax Update still processes transactions, like returns or credit memos, that may be entered in the future.

NOTE: AvaTax Update calculates tax in all regions you select. However, just because AvaTax Update is calculating tax does not mean you are registered to collect and remit in those regions. Verify where your company is registered to collect and remit tax before finalizing your settings in AvaTax Update.

Add to where you collect and remit sales and use tax

  1. Go to Settings > Where You Collect Tax.
  2. Add a region where you collect the tax or add a local authority to a region where you're already collecting sales and use tax.
    • Add a region - Click Add to where you collect sales and use tax. Then check the box beside the region where you should collect. When you finish, click Add Selected Regions. If the state has local jurisdictions, AvaTax Update prompts you to add those as well. Choose whether to add local authorities based on your business address or pick them from a list. If you add local authorities based on an address, by default AvaTax Update creates a company location based on the address unless you uncheck Create a company location from this address.
    • Add a local authority - Locate the region in the list and click Details. Select the tax type for the region, and then choose whether to add local authorities based on your business address or pick them from a list. If you add local authorities based on an address, by default AvaTax Update creates a company location based on the address unless you uncheck Create a company location from this address.
  3. Click Done with (Region Name), and then click Done with tax jurisdictions to finish.
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