Consumer use tax is a transaction tax collected and remitted in the U.S. by consumers when sales tax or sellers use tax aren't charged on a purchase. Consumers may be required to pay consumer use tax depending on how and where the products are used.
Avalara Consumer Use is an add-on for AvaTax. Adjust transactions in Avalara Consumer Use and then forward them to your AvaTax company to manage reports and returns.
How Avalara Consumer Use works
Use this application to self-assess your consumer use tax obligations. The assessment process typically follows this order:
- Upload your transactions using an import template
Avalara Consumer Use stores Master Data records that can be used to automatically update future transactions.
- The system processes your transaction data and calculates consumer use tax
In addition to consumer use tax calculations, transaction data is updated based on any pre or post-calculation rules that you create.
- Compare the results to the tax charges from your vendor
Processing rules and tax calculations offer a clear picture of your consumer use tax obligations.
- (Optional) Create new transactions in AvaTax to cover additional taxes
If you owe additional taxes to a state, create those transactions in AvaTax before you file returns.
Avalara Consumer Use and Master Data
Avalara Consumer Use utilizes a concept called Master Data, where essential information about entities, locations, or products are stored independently of transaction records. Once stored, Master Data records can be cross-referenced to automatically pull in other information whenever a specific transaction value enters the Avalara Consumer Use system.
For example, creating a Location Master Record offers a shortcut in future transaction imports. Once Avalara Consumer Use recognizes the relationship between a specific Location Master Record and a location code in your transaction data, the system will automatically use the correct address information that matches the location code. This is particularly useful when working with ERPs that don't capture origin addresses on vendor invoices.
Adding Master Data records to Avalara Consumer Use
If your implementation requires certain Master Data records to calculate tax, remember that Avalara Consumer Use saves Master Data relationships even if that transaction data is deleted later. Create default values by importing a file of placeholder transactions containing important records, and then delete the unneeded transactions afterward.