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Install and Configure Avalara AvaTax for Stripe Invoicing

This article applies to:AvaTax for Stripe Invoicing

After you activate AvaTax and set up your company profile, install and configure AvaTax for your business application. During configuration, customize your setup to fit your unique business needs for things like:

  • Tax calculation settings for various tax types
  • Exemption settings if you have exempt customers
  • Product taxability settings

Alter these settings when your business needs change.

If you want tax to display within Stripe Checkout, integrate with the Avalara API.

Before you begin

If you prefer not to use draft invoices in Stripe Invoicing, to make sure that the sales tax is calculated for subscriptions, set the "pay_immediately=false" flag. This prevents Stripe Invoicing from paying the invoice for some time after your subscription is created, and AvaTax for Stripe Invoicing can update the first recurring invoice within this time frame. Contact Stripe Invoicing Support to have them add your account with this argument to their allow list. Only accounts that are on the allow list can use this argument.

Connect AvaTax to Stripe Invoicing

To connect AvaTax to Stripe Invoicing:

  1. Go to the AvaTax for Stripe Invoicing website, and click Connect with Stripe.
  2. Click Sign in with Stripe to connect, and then sign in with your Stripe Invoicing account credentials.
    • If you're an existing AvaTax for Stripe Invoicing user, skip the remaining steps; you're ready to work.
    • If you're a new user, finish the remaining steps.
  3. On the Avalara login page, enter you AvaTax account ID, username, and password, and then click Link My Avalara Account.
  4. From the Select Company list, make the correct selection:
    • To use an existing company, select it from the list, click Link Company, and then enter an origin address.
    • To create a new company, select Create New Company, click Link Company, and then enter company profile details.
  5. Beside Webhook link for Stripe integration, copy the link.
  6. Go to your Stripe Invoicing dashboard, and then click the following text to switch to the environment you want to connect to AvaTax if you're not already there:
    • If View test data displays, you're in the production environment.
    • If Viewing test data displays, you're in the test environment.
  7. Go to API > Webhooks, and then, beside Endpoints Receiving Events from Your Account, click Add endpoint.
  8. Fill in the following fields:
    Field Action
    URL to be called Paste in the webhook link you copied
    Filter event
    • To send the details of all event types to AvaTax, select Send All Event Types
    • To send details of only selected event types to AvaTax, select Select Types to Send, and then select types. We recommend at least the following:
      • Invoice.created
      • Invoice.updated
      • Customer.created
      • Customer.updated
      • Charge.refunded
      • Charge.succeeded
  9. Click the webhook link you pasted in, under Signing Secret click Click to reveal, and then copy the revealed signing secret.
  10. On the AvaTax for Stripe Invoicing site, on the Setup page, paste the signing secret into Webhook signing secret.

Configure AvaTax for your accounting software

To configure AvaTax for Stripe Invoicing:

  1. Go to the AvaTax for Stripe Invoicing website, and click Connect with Stripe.
  2. Click Sign in with Stripe to connect, and then sign in with your Stripe Invoicing account credentials.
  3. Click Setup.
  4. Click Edit Configuration at the bottom of the page in order make the changes you want. When you're finished, click Save Configuration
    Field Action  

    AvaTax Account ID

    To use a different ID, enter the desired ID, enter the AvaTax username and password for the account you want to use, and then click Validate Account.
    Company Select the company to use for your AvaTax account. This company's information is used when calculating tax.
    Origin address details The address used as your origination address when calculating sales tax. Update the information if necessary.
    Do you sell tax-inclusive products?
    • If the prices on your invoice already include sales tax, select Yes. AvaTax calculates taxes as a portion of the price, not in addition to the price. The total on your invoice will be equal to the price.
    • If the prices on your invoice don't include sales tax, select No. AvaTax will add sales tax to the invoice. The total on your invoice will be equal to the price plus tax.
    Optional: Calculate tax on

    Select either or both options.

    • To calculate tax on charges, select Charge/Payment.
    • To calculate tax on invoices, select Invoice.
    Optional: Tax on Invoices

    Choose a type of invoice for calculating tax:

    • Recurring: Tax is applied on recurring invoices.
    • One-time: Tax is applied on normal invoices.
    AvaTax Integration Status Enable this to use AvaTax to calculate taxes.
    Tax label on Invoice Enter text to display on the invoice tax line for AvaTax.
    Optional: Tax label on Charge Enter text to display on the charge description for AvaTax.
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