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Avalara product enhancement for Marketplaces, June 2022

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What is happening

Avalara is enhancing the AvaTax Determination solution to support tax calculation of ancillary transport activities (such as freight) per consignment for Marketplaces.

A consignment is defined as goods packed together and dispatched simultaneously by the same supplier (MerchantSellerId) to the same consignee and covered by the same transport contract (same ShipFromAddress and ShipToAddress). 

AvaTax order of operations

If the engine is not able to find a matching set of the same supplier, ship from and ship to, it will default to find consignments matching in the following order:

  1. Consignments with the same supplier and ship to country

  2. Consignments with the same supplier

  3. Consider all consignments and apply the Company TaxDependencyLevel setting

What you need to do

AvaTax will calculate tax on the ancillary transport activities based on the tax rate applied to the goods within the same consignment only if the Marketplace has opted in for this feature to apply.

Marketplace must set the Company IsMerchantSellerTaxDependency parameter to True. If this field is not set as True, no changes will apply to the current behavior.