When your business application sends a transaction to AvaTax Update, this is the order in which a transaction is calculated:
- Should AvaTax Update calculate tax in this region?
- AvaTax Update looks at the origin and destination address to see if tax needs to be collected. This is based on where you collect and remit tax.
- Is the customer taxable?
- AvaTax Update looks at the Customer/Vendor Code and sees if the customer is exempt from sales tax based on a number of methods for exemptions.
- Is the product or service taxable?
- AvaTax Update looks at the line-level of the invoice to determine what tax rate to apply to items.
Anatomy of a transaction
|Transaction data...||What it means...|
Ship-from address, ship-to address
These two addresses are important for states with unique sourcing rules.
|Customer/Vendor Code||Identification number associated with a customer or vendor. This number is linked with exemption methods in your business application, AvaTax Update, or CertCapture.|
Item code or SKU associated with your products or services. Mapped to tax codes in either your business application or AvaTax Update.
Item Descriptions are required for customers participating in the SST program. See SST Transaction Requirements.
|Tax Code||A unique label used to group items (products, services, or charges) by taxability. Can be an Avalara tax code or a custom tax code.|
|Harmonized Tariff Code||
A unique identifier to classify imported goods for customs duty. Not required for most transactions in the US and CA.
Look up tariff codes or contact an account manager if you need this field for international transactions.
|Document Code||Identification number associated with the correlating transaction from your business application.|
|Line Amount||Amount listed per line on a given transaction. Used to calculate sales tax.|
|Tax Date||Date the tax is calculated. Usually the same as the document date, but may be different depending on your accounting practices. For example, if you calculate sales tax on 04/01, but don't commit the transaction to AvaTax Update until 05/01, the tax date and document date will differ and the tax rates could have changed.|
|Document Date||The date the transaction is finalized and committed to AvaTax Update. Usually the same as the tax date, but may be different depending on your accounting practices. For example, if you calculate sales tax on 04/01, but don't commit the transaction to AvaTax Update until 05/01, the tax date and document date will differ and the tax rates could have changed.|
|Status||A label to indicate the reporting status of the transaction. Committed transactions are included in all reports and returns filed by Avalara while uncommitted and voided transactions aren't included.|
Get information on a transaction
To see detailed information about how taxes were calculated, in AvaTax Update go to Transactions and click on the transaction you want to review. Here you can see a summary of the taxes calculated, for the whole transaction or broken up by line item.
For more details, click the arrow next to a line item to get a breakdown of tax calculations for that specific part of the transaction. If you want even more information about the tax on a line item, click Review these calculations.