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Set up AvaTax for QuickBooks Online

This article applies to:Connector for QuickBooks Online

AvaTax for QuickBooks Online works with the suggested default settings, but you can update them to meet your company's business needs.

Launch Avalara AvaTax

Launch Avalara AvaTax to manage your integration.

Steps

  1. In QuickBooks Online, go to Apps.
  2. Click the My Apps tab.
  3. Scroll the page to locate Avalara AvaTax, and then click Launch next to it.

    Avalara's sign-in page is displayed in a new tab.
  4. Sign in by using your Avalara credentials.

    Avalara AvaTax for QuickBooks Online's Manage your integration page is displayed.

Manage integration settings

Steps

  1. Launch Avalara AvaTax to open the Avalara AvaTax for QuickBooks Online's Manage your integration page.
  2. Click AvaTax connector settings.
  3. The QuickBooks Connector Settings page invokes the following details under Avalara account:
    • Account ID: Your AvaTax account number (Un-editable)

    • Avalara Username: The username you use to log in to AvaTax (Un-editable)

    • Avalara Company: List of companies you have linked to AvaTax, which are associated to the current Account ID. Select the desired company from the drop-down list.
      All transactions done in QuickBooks Online will be recorded against this company.

    • Avalara Company Code: The company code for the selected Avalara Company is displayed.

  4. If you want to schedule a Start Date for tax calculation and reconciliation, enter a date in the Schedule Start Date for AvaTax Calculation box. 
    Note: If a Start Date is entered, only those transactions done on and after this date are considered for tax calculation and reconciliation. Transactions done before this date are not considered for tax calculation and reconciliation.

    If you want that all transactions, irrespective of date, should be considered for tax calculation and reconciliation, do not enter any date.
  5. Manage the following Integration Settings:

    • Address Validation: Select to enable address validation.

      • If enabled, AvaTax validates the customer address in QuickBooks Online when creating a customer.

        AddressValidation.png
        QuickBooks Online's customer information displays a validated address in ALL CAPITAL letters.

      • If disabled, AvaTax uses the customer's ship-to address to calculate the correct sales tax. In this case, sales tax might be calculated incorrectly.

    • CALCULATE TAX FOR:

      • All Customers: If selected, QuickBooks Online sends transactions for all customers to AvaTax for tax calculation, and then AvaTax exempts customers marked exempt.

      • Only Taxable Customers: If selected, QuickBooks Online sends transactions for only taxable customers. No exempt customer transactions are sent to AvaTax.

    • SALES TAX ITEM: A tax item created by AvaTax to mark customers as taxable. Select the Tax Product/Item Name mapped with Sales Tax Payable sub-account in QuickBooks Online.

      Invoice.png
      When creating a transaction document (for example, invoice) in QuickBooks Online, you select the Estiate Tax button to add a line item displaying the sales tax details calculated by AvaTax.

Manage where you collect tax

As an online seller, you have to collect sales tax from customers in those states where you have sales tax nexus. AvaTax uses certain criteria to suggest states where you may need to collect tax.

Steps

  1. Launch Avalara AvaTax to open the Avalara AvaTax for QuickBooks Online's Manage your integration page.
  2. Click Manage where you collect tax.

    The Where you collect tax! page displays various regions. 
  3. You're automatically set up to collect tax in those regions which are already marked selected.
  4. Add more regions based on your company's needs.

Manage tax reconciliation

Enable/disable tax reconciliation

Steps

  1. Launch Avalara AvaTax to open the Avalara AvaTax for QuickBooks Online's Manage your integration page.
  2. The Calculation active check box is by default selected to enable AvaTax for tax calculation and reconciliation.
  3. (Optional) If you want to disable tax calculation and reconciliation, clear the check box.

Recalculate tax

Sometimes the values of calculated taxes displayed in AvaTax may not match with those in QuickBooks Online. You can recalculate taxes to fix such instances by using the Reconciliation utility.

Steps

  1. Launch Avalara AvaTax to open the Avalara AvaTax for QuickBooks Online's Manage your integration page.
  2. Click Reconciliation utility.
  3. Filter transaction for a window of maximum 90 days, and then click Search.
  4. Under Results, view the number of inconsistent, consistent, and total transactions.

    The taxes recorded in QuickBooks Online and AvaTax are displayed for all invoices in the table.
  5. If there are any inconsistent transactions, select them from the table and then click Recalculate Tax.
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