What is the difference between Document and Line level rounding?
Overview
A discussion with examples of what happens when the default linelevel rounding is changed to documentlevel rounding.
Environment
AvaTax
Resolution
 Rounding in AvaTax may produce different results depending on how your tax profile was set up at the time of the transaction
 By default, the rounding level is set to Line
 Which means the tax is computed on each line, and if the result is a multiple integer (i.e. 2.6584) exceeding hundredths, it is rounded up to whole tenths (i.e. 2.66)
 Then the rounded results for each of the lines is summed into a total tax amount reported at the document header.
 Setting the value to Document results in the linelevel rates for each separate taxing jurisdiction (still in their multiple integer state) to be summed to a total and then rounded to the nearest tenth of a cent.
 Consider this example of 3 items with two taxing jurisdictions – one at 6.5% and the other 2.5%.
 Book
 Book Mark
 Reading Light
 Note what happens when linelevel rounding is used. Each line is rounded to the nearest 10^{th} then those results are totaled ($5.19). However when documentlevel rounding is applied, the lines aren't rounded, totaled as multiple integers, then that result is rounded ($5.20).
 Please note that for the State of Florida, standard engine rounding is not taken into consideration, as the state has tax brackets, based on the item amounts. Please reach out to the Florida Department of Revenue if you have more questions about their tax bracketing system.
6.5% 
2.5% 
Line 
Document 

$ 40.80 
2.652000 
1.020000 
3.67 
3.6720 
$ 1.98 
0.128700 
0.049500 
0.18 
0.1782 
$ 14.99 
0.974350 
0.374750 
1.34 
1.3491 
TOTAL Tax 
Computed 
$5.19 
$5.20 
 The states are aware of the possible 1 penny difference in these scenarios and have certified Avalara to use either method of rounding.
 Linelevel rounding:
 The upside of leaving the default in place is that the component sum will always match the total tax, AND customers will end up paying a penny less when it is different (often both methods yield the same tax anyway).
 The downside of leaving the default in place is that cash register totals will disagree by a penny.
 Documentlevel rounding
 The downside of changing the default line level rounding to documentlevel rounding is that the sum of the component taxes will sometimes be 1 penny less than the total tax for the document.
 The upside is that total tax quoted will match cash register totals that the DOR publishes.
NOTE: AvaTax rounds by jurisdiction for that jurisdiction's tax rate, not by the combined tax rate.
 If the address has multiple jurisdictions, the tax rate is rounded for each jurisdiction and then added together.
 The tax rate is not combined for all jurisdictions and then rounded.