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Map an item or item group to an Avalara tax code in Microsoft Dynamics 365 Business Central

Some products—such as clothing, food, software, medical supplies, software subscriptions, and freight—are taxed differently depending on where they're sold. To get the most accurate rate for these items, map them to Avalara tax codes. If you don't map items or item groups to Avalara tax codes, all products and services are taxed at the standard rate for each jurisdiction.

Before you begin

Review the guidelines for mapping items to Avalara tax codes if you aren't sure whether to map items in Microsoft Dynamics 365 Business Central or AvaTax.

Steps

  1. In Microsoft Dynamics 365 Business Central, search for "tax groups" and then select Tax Groups from the search results.
  2. Create a new tax group.
    1. Select +New.
    2. For the code, enter the Avalara tax code you want to assign to this new group.
    3. Enter a description that makes sense for your business.
    4. Select Edit List to save the tax group.
      The tax group is created.
  3. Add details to the new tax group.
    1. Select the tax group you just created.
    2. Select Navigate and then select Group > Details.
      The Tax Details window opens.
    3. Complete the following:
      • For the tax jurisdiction code, enter AVATAX.
      • Verify that the tax type is correct.
      • Set the effective date to any time in the past.
    4. Select the Back arrow to return to the Microsoft Dynamics 365 Business Central home page.
  4. Associate an item or item group to the new tax group.
    1. Go to Avalara AvaTax > AvaTax Taxability Code Mapping.
    2. Select +New.
      The AvaTax Taxability Code Mapping window opens.
    3. Complete the following:
      • For the type, select Item or Item Category Code from the dropdown list.
      • Under No., select the item or item group you want to associate with the tax group.
      • For the AvaTax taxability code, select the tax group you want to associate with the item or item group.
    4. Select Edit List to save the mapped item or item group.
    5. Repeat this step to map more items or item groups.

You've now mapped an item or item group to an Avalara tax code.