AvaTax is overriding existing tax rules already set up in Magento.
In Magento under "Sales" > "Tax", "Manage Tax Rule" is removed when Action is set to "Enable: calculate tax".
When Action is set to "Disable", "Manage Tax Rule" is present under "Sales" > "Tax".
Magento by One Pica
When AvaTax is active, all sales tax rules will be governed by AvaTax. Therefore, will override any custom rules you have in place. All native Magento tax utility rules are disabled. This is by design between AvaTax and Magento.