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How do I create a location code in AvaTax Update for a new state where Amazon is remitting tax as the marketplace facilitator?

A state Department of Revenue has updated requirements related to marketplace sellers. You need to add a marketplace location code marked as “Marketplace Remits Tax”, so extracted Amazon transactions from that state are identified as deductions for your Returns. To provide context, we have included "What is a location code?", "Why do I need to add the location code?", and "How do I find extractor transactions in AvaTax Update?" at the bottom of this article.

Set up a marketplace location

Because Amazon has identified a new state where it will remit tax for their sellers, you’ll need to create a new location that reflects this change. The new location retroactively applies to older transactions from this state as long as that location code is listed on the transaction.  

  1. In AvaTax Update, click Transactions and find a marketplace transaction from the state. Copy its location code. 
  2. Select Settings. Then select Manage my locations
  3. Click Add a location
  4. Paste or type the location code you copied in step one.
    • The location code begins "AMAZON_DATASOURCE_" make sure to include the exact code listed on your transaction with the state abbreviation and the numbers at the end.
  5. For the location Type, select Marketplace.  
  6. For the location Category, select Marketplace remits tax.  
  7. In the Address section, enter your primary business address.
  8. For Start Date, enter the date Amazon began remitting tax.
  9. Click Save this location.  

What is a location code?

Every transaction from an Extractor includes a location code. Location codes help you report how you generated a sale, whether via a storefront, a salesperson, a marketplace, or some other channel.

Why do I need to add the location code?

Even though the marketplace remits the tax, states with marketplace fairness laws require sellers to file a tax return and deduct the transactions. For this reason, all extractor transactions in AvaTax are tagged with a specific location code. By setting up that location code marked as “Marketplace Remits Tax”, those transactions are identified as deductions for your Returns.

How do I find extractor transactions in AvaTax Update?  

Use filters to find extractor transactions.  

  1. Log in to AvaTax and click Transactions
  2. Click Filters and select Amazon. Click Apply
  3. You’ll see all the extractor’s transactions, which have a unique value applied to their location and document codes. Click a transaction to see its location information. 

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