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AvaTax settings for Microsoft Dynamics 365 Business Central

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This article applies to:Avalara AvaTax for Microsoft Dynamics 365 Business Central

{AAT}} for Microsoft Dynamics 365 Business Central works with the suggested default settings. But you can adjust them any time based on your company's business needs.

Log in to Microsoft Dynamics 365 Business Central, search for AvaTax Configuration, and then select Avalara AvaTax Configuration. Make the changes you want. 

Account Credentials

Field Action
  • Account Number
  • License Key

View your account number in AvaTax. Select Settings > All AvaTax settings. The account number is listed at the top of the page as your Account ID. If you don't know your license key, get a new one.

Click Verify Credentials when you update this information.
Web Service URL
  • If you have an AvaTax development account, select Sandbox.
  • If you have an AvaTax production account, select Production.
Company Code Select the company code that you created in AvaTax from the list. Every business application that works with AvaTax uses a company code to identify itself to AvaTax.

General

Field Action

Optional:

  • User Defined 1
  • User Defined 2
 Select the type of data you want to send to AvaTax.
Optional: Send Item account to AvaTax Select to send the general ledger account number for an item to AvaTax for reporting purposes. The number displays in the Revenue Account field on the line item.
Extensive Logging When you enable extensive logging, a service log is sent to Avalara. The log is used for troubleshooting.

Tax Calculation

Field Action
Optional: Disable Tax Calculation If you choose to disable tax calculation, your accounting software no longer uses AvaTax to calculate tax on transactions.
Tax Calculation Date Select which date to use when calculating tax.
Optional: Always Check Address Before Calculating Tax

Select to display address validation results for each transaction. Selecting this option may result in additional transaction fees.

AvaTax does an implicit address validation during the tax calculation process however, it doesn't display the results in the user interface. Validated addresses are stored in the transaction but not on the source record.

AvaTax may still calculate taxes on the transaction, regardless of address validation results.
Optional: Show AvaTax Tax Details Before Sales Statistics Window Select to view the AvaTax-calculated sales tax details before they show in the sales statistics page.
Optional: Use UPC as Item Code Select to send a UPC instead of an item code to AvaTax. Talk to your Customer Account Manager (CAM) for more information.
Optional: Enable Entity Use Code

Enable to map entity/use codes for your customer addresses to flag them as exempt from sales tax.
Exempt Processing
  • Sell-to Customer: This is the default setting. If selected, AvaTax uses sell-to customer exemption details for exemption processing.
  • Bill-to Customer: If selected, AvaTax uses bill-to customer exemption details for exemption processing.
Tax Area Code

Identifies the default sales tax group. Select AVATAX to use AvaTax as the tax calculation method.
Return Address Select the address you want to use for return orders and credit memos.
  • Shipping: Use the ship-to address.
  • Customer: Use the sell-to address.
  • Invoicing: Use the bill-to address.
Enable Asynchronous AvaTax Posting
  • If this option is disabled, after AvaTax calculates sales tax, it posts the transaction to both Microsoft Dynamics 365 Business Central and AvaTax. After posting, the Doc Status of this transaction in AvaTax is Committed.
  • If this option is enabled, after AvaTax calculates sales tax, it only posts the transaction to Microsoft Dynamics 365 Business Central. To post the transaction to AvaTax, use the Asynchronous Posting utility. After you run the utility, the Doc Status of this transaction in AvaTax changes from Uncommitted to Committed.
Optional: Enable Service Module Integration Select to enable service module integration.
Use Tax Assessment
  • Optional: Enable Use Tax Assessment: If enabled, your accounting software uses AvaTax to calculate consumer use tax on purchase invoices.
  • Credit GL Account: Select the accrual account to which you want to credit your accrued use tax.
  • Debit Account Options: Select the type of account from which to debit use tax assessments. If you select Single Account, select the account from the Debit GL Account list. If you select Inventory Account, the amount will be debited to the associated inventory posting account.
  • Debit GL Account: If you select Single Account, select the account from which to debit use tax assessments.
  • Gen. Journal Batch Name: Select AvaTax to see the journal source of AvaTax.

Address Validation

Field Action
Optional: Disable Address Validation

If you disable address validation, AvaTax uses the customer's ship-to address as entered to calculate the correct sales tax.

If an address can't be validated at the street level during tax calculation, AvaTax uses the city, state, and ZIP or Postal Code to calculate sales tax.
Optional: Return Results in Uppercase Select to save all address validation results in uppercase format.
Optional: During Batch Address Validation, continue processing regardless of errors Select to prevent errors from stopping batch address validation.
Optional: Accept Validated Address during Batch Address Validation manually Select to prevent validated addresses from being automatically accepted. If this option is disabled, validated addresses are automatically accepted and updated.
Optional: Country Codes for Address Validation

Click Set Country Codes for Address Validation, and then select the countries for which AvaTax validates addresses. (AvaTax validates addresses only in the United States and Canada.)