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Establish a connection between AvaTax and Microsoft Dynamics 365 Finance and Operations

After you install Connector for Microsoft Dynamics 365 Finance and Operations, connect Microsoft Dynamics 365 Finance and Operations to AvaTax.  

Before you begin 

Steps

  1. In Microsoft Dynamics 365 Finance and Operations, go to Modules > Avalara AvaTax > Setup > Set Up the AvaTax Connector.
  2. On the Connect to AvaTax tab, enter your account credentials to connect Microsoft Dynamics 365 Finance and Operations to AvaTax, and then select Connect to AvaTax.
    1. Enter your AvaTax account ID and license key.
    2. For the environment, select Edit Settings and then select whether you want to connect to a production or a sandbox account.
    3. Select Verify Credentials to confirm the information you entered is correct.
    4. For the company, select the company you created in AvaTax that you want to associate with your company in Microsoft Dynamics 365 Finance and Operations.
    5. For the sales tax group, select AVATAX to use AvaTax for tax calculation.
      If you haven't mapped that sales tax group to the general ledger (GL) posting group, select Map to do so and then come back to this step.
  3. On the Sales Tax Settings tab, make sure Disable AvaTax Tax Calculation is set to No, and then update the sales tax group to use AvaTax to calculate tax for customers or vendors.
    1. Select Map Sales Tax Group. The Tax Group pane opens.
    2. Select whether you want to map a customer or a vendor.
    3. From Sales Tax Group, select AVATAX.
    4. Select the first customer in the range from From and select the last customer in the range from To.
    5. Select Ok.
    6. Repeat these steps to add other customers or vendors.
  4. On the Address Validation tab, make sure Disable AvaTax Address Validation is set to No, and then select the countries for which you want address validation enabled.
    Address validation is currently available for the U.S. and Canada.
  5. On the Consumer Use Tax Settings tab, if you want us to calculate consumer use tax, enable that and set up vendors and accounts associated with it.
    1. Make sure both AvaTax Use Tax Calculation and Map Vendors to Assess Use Tax are set to Yes, and then select Map Vendors.
      The Consumer Use Tax Mapping utility opens.
    2. Select the range of vendors for which to calculate consumer use tax, select Enable, and then select OK.
    3. Select your preferred product or item-level settings.
    4. Select the GL accounts and information AvaTax should use for consumer use tax.

      Tip icon

      To learn more about the consumer use tax settings and other configuration options on these tabs, see AvaTax settings for Microsoft Dynamics 365 Finance and Operations

  6. Refresh any workstation that was open while completing these steps to ensure it's updated with the most current Connector for Microsoft Dynamics 365 Finance and Operations configuration settings.

Microsoft Dynamics 365 Finance and Operations is now connected to AvaTax and ready to send transactions for tax calculation. To further customize the way Microsoft Dynamics 365 Finance and Operations interacts with AvaTax, see AvaTax settings for Microsoft Dynamics 365 Finance and Operations