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How do I tax only a portion of an item value?

Overview

You want to know how to make only a portion of an item's value taxable.

Environment

Avalara AvaTax

Resolution

  • Create a Base Override rule
    • list the percentage of the item value that should be taxable, you can list 0% - 200%
    • You can make it apply to only one specific tax code, create additional rules for other tax codes
  • If the item is not typically taxable in that state, you must also create a Taxability Rule:
    • Choose Taxable = YES
    • Use same tax code