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Why are shipping charges are being taxed, when they should not be taxed?

Overview

Shipping is charging tax on transactions when it shouldn't be.

Environment

Avalara Avatax

Resolution

  • Log into the admin console and navigate to the transaction
  • Click on the DocCode to look at the Transaction Detail Window
  • Look over the Shipping line item being passed and be sure it is using the proper tax code
  • If your Shipping line isn't using the right tax code you can map it to a Freight Tax Code by:
  • Click Organization tab
  • Click the icon under Items
  • Click the orange New button
  • Populate the Item Code field with the Item your sending us exactly (must be an exact match)
  • Populate the description field with whatever description you feel is appropriate (this field is for your records)
  • Populate the Tax code Field with a freight tax code (FR for example)
  • Click Save
  • You should now see any line item using the Item code you have mapped to Tax code FR (or other Freight code) correctly pulling that Tax code.
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