Each of your client's companies is obligated to calculate, collect, report, and pay taxes within the taxing jurisdictions in which it sells products and services. As a company changes over time, regularly review the company settings to make sure the company is meeting its tax obligations. Add jurisdictions to change where and when taxes are calculated and reported for a client's company.
You can add these settings at a country, state, and local level. You can also bulk add jurisdictions.
The upper-level jurisdiction must be enabled before you can enable the next lower-level jurisdiction. For example, US must be enabled before you can enable the Arizona jurisdiction, which must be enabled before you can enable the Apache Junction jurisdiction.
Before you begin
Evaluate the client’s tax profile to determine the appropriate taxing jurisdictions.
- In Returns for Accountants, go to Filing calendars > Nexus management.
- Use the Filters pane on the left to locate the desired company and nexus group type, then select Go.
- In the table, select the + icon to add nexus.
The Add country nexus menu opens.
- Select a country.
- Select a Nexus type:
- Sales or sellers use tax: Collect sales tax on intrastate transactions, and sellers use tax on interstate transactions
- Sales tax: Collect sales tax on all transactions
- Enter an Effective date for the country nexus.
The country-level effective date must be earlier than the nexus effective date of all regions within the country.
- Optionally, enter an End date for the country nexus.
The country end date must be later than the nexus end date of all regions within the country.
- Select Next.
The Add region nexus menu opens.
- Select any regions where the client has nexus, then select Next.
- If any of the selected regions have a flat rate for remote sellers or direct marketers, the Regions with Remote Seller menu is displayed.
- Simplified rates are available in AL, LA, and TX.
- The simplified rate option is enabled by default in these states. Clear the checkbox for any regions where your client isn't registered to collect the simplified tax rate, then select Next.
- If any of the selected regions have local nexus requirements, the Setup local nexus menu is displayed. Select a local nexus type, then select Next.
The available local nexus types are:
- Applied to all locals: Nexus is enabled in all local jurisdictions.
- Selected: In a later step, you must select specific local jurisdictions where the client has nexus. Collecting tax is compulsory in some state-administered local jurisdictions, and nexus is automatically enabled in these jurisdictions.
- State-administered: Avalara advises against selecting this option. Instead, choose the Selected option and determine if your client collects tax in any of the available jurisdictions.
- On the Validate nexus to be added menu, review the new regions and then select Save to save your changes.
- If you added a region with the Selected local nexus type, a message appears indicating that you must add local nexus for the region.
- Select OK to dismiss the message, then select the Locals button to the far right of the region name.
- Select Add new locals.
- Enter an effective date for the local nexus.
This date applies to all regions you select here, but you can change the effective date for individual regions in a later step.
- Optionally, enter an end date for the local nexus.
This date applies to all regions you select here, but you can change the end date for individual regions in a later step.
- Select the local regions where the client has nexus.
- Select Approve selection.
- Optionally, select the Edit button for any regions where you need to adjust the effective or end date, then select Update.
- Select Save.