Why is my transaction not calculating the correct amount of tax?
Overview
You have a transaction that is calculating tax but the amount calculated is incorrect.
Environment
Avalara AvaTax
Resolution
There are several reasons why the tax amount may be incorrect.
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The tax rate in the jurisdiction may have changed.
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The address on the invoice has only a State and Zip Code.
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Always include the address, city, state and zip code on a transaction. This ensures the precise tax rate is generated.
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You may not have established Nexus in the taxing jurisdiction
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If you have Nexus in the jurisdiction you may not have the correct tax type selected.
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If that is the case then we suggest contacting the applicable state to verify which tax type you should be collecting.
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If there is a Tax Code in the transaction it may/may not be taxable in the applicable jurisdiction
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If there is an Entity Use Code being used it may/may not be taxable in the applicable jurisdiction
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If there is an Exemption Certificate being used it may/may not be taxable in the applicable jurisdiction
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If you are using a Custom Tax Rule it may not have been applied correctly.
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There may be a Jurisdiction Override in place for the specific address and/or zip code. Alternatively, it could be that a Jurisdiction Override needs to be created to compensate for a boundry that has just changed.